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Ex-circle head Dan Matuszewski, who is now co-founder of trading firm CMS Holdings, discussed Tether and explained why the cryptocurrency was not the leading force behind 2017’s bitcoin bull run since Tether is one-to-one dollar-backed as we are reading further in the Tether news.

The Ex-circle head left Circle in August 2019 and as one of the largest OTC desks which handle about $2 billion a month, Dan believes he is qualified to discuss all things crypto-related. In an interview for the On The Brink podcast, he shared some startling insights on the crypto’s most hated stablecoin- Tether.

Matuszewski opened the interview by saying that Tether does not prop up the price of Bitcoin and that it was not responsible for the dramatic price rally in 2017 of bitcoin. He attributes this to the price arbitrage at an institutional level between different exchanges mainly Bitfinex and Coinbase. He explained further by saying that Coinbase was a beacon of confidence in the crypto industry. this was one of the reasons newcomers who watched out for scammers, chose coinbase when buying Bitcoin. He explained:

 “The majority of net buying inflow was on Coinbase. And that was purely because Coinbase was the fastest and easiest way to get into the industry and buy Bitcoin, hands down.”

Bitfinex has been hacked in the past and also doesn’t guarantee losses and was not appealing for the newcomers. This also led to a lower price of Bitcoin. With this in mind, Matuszweski described the movements as a daily scramble that sent every spare dollar to Bitfinex in order to buy Ether and Bitcoin. Onboarding was extremely easy because of the painless functionality to change the dollars to Tether. He continued:

 “What came in from settlements and what’s not nailed down and spoken for? Right take all that money, boom, and shoot it over to Bitfinex as fast as you can. Because you wanted to get as much money there as you could. So you could buy Bitcoin and Ether primarily… and send them over to Coinbase, and then yank the money out of the door as quick as you can.
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As such, the issuance of Tether blew up and spread the difference between Coinbase and Bitfinex but the issuance was symptomatic of what was going on with the price arbing. With the allegations that the bitcoin bull run was a result of market manipulation with the help of Tether, Matuszewski noted:

 “I can tell you billions of dollars were sent in, like to make Tether, I can 100%, without question verifiably guarantee that happened. I did it, I was there… That money was not being hypothecated, it wasn’t just coming out of thin air.”