New Study Shows: No Correlation Between Bitcoin’s Price And Tether

A new study published by the University of Queensland reached today’s bitcoin news where the writer Wang Chun Wei explains that USDT grants do not have a significant effect on bitcoin’s price fluctuations.

In the study, however, you can see that there is a positive relationship between USDT issuance and the increased trading in cryptocurrencies right after. Wei claims there’s no evidence of USDT manipulating BTC’s price. The key proclamation in the study is that ‘’it’s unlikely that tether manipulation caused the 2017 bitcoin rally.

However, Wei argues that USDT grants propose a light relationship with some price swings between Tether issuance and the trading volume and that Tether trading even increased the periods of negative Bitcoin returns. He also notes that he found Tether grants were timed to follow Bitcoin’s slumps confirming another study by Griffin and Shams where they say that purchases with Tether are timed to follow Bitcoin dips so Tether can be used to support Bitcoin prices.

Many other analysts will happily disagree with Wei. Some believe that even though there are many factors that impact Bitcoin’s price movements, bitcoin rallies are correlated with a new issuance of USDT, which is the dollar-pegged “stablecoin” token. The fact that Tether is issuing new tokens is a sign that new capital is coming in the crypto markets. The tokens are created when individuals or organizations deposit physical dollars into Tether’s reserve bank accounts. Also, there are analysts who claim that Tether is increasingly impacting the prices of smaller altcoins such as EOS and NEO instead of the large-cap altcoins.