Tether has no real impact on Bitcoin's price: study says
According to a new study, tether issuance doesn't affect bitcoin's price.
Come again?
For months now, everyone and their dog has been convinced that tether and Bitfinex pulled over a giant scam on the entire investing community back in 2017.
The claim was that tether was issued very strategically and used to support bitcoin prices any time they started to crash back in 2017.
This resulted in the massive rally we saw end of 2017 where bitcoin reached nearly $20k.
Once this information started to circulate, news outlets and even some regulators starting crying "foul!".
Saying that bitcoin was manipulated and the prices were fake...
Fast forward to today and that might not exactly be the case.
A new academic study by researcher Wang Chun Wei of the University of Queensland Business School was able to show that the tether issuance had a negligible effect on bitcoin prices.
The report can be seen here:
https://www.sciencedirect.com/science/article/pii/S0165176518302556
The report uses a Value-at-Risk (VAR) model in order to show that there is not actually any significant price movement directly related to tether issuance.
The big take away from the report:
“We find no empirical evidence supporting the notion that Tether grants cause subsequent Bitcoin returns to rise on a daily basis. In fact, when we examine the Bitcoin return equation of our VAR model, none of the lagged variables, impacts Bitcoin returns. This suggest Bitcoin returns are showing greater signs of market efficiency than previously studied on older datasets.”
(Source: https://www.ccn.com/tether-no-real-impact-on-bitcoin-price-university-researcher/)
Though, there is a correlation to trading volumes.
IE, trading volumes tend to be elevated for the 5 days following tether issuances.
(Source: https://www.ccn.com/tether-no-real-impact-on-bitcoin-price-university-researcher/)
No evidence of any correlation to bitcoin prices?
Given that finding one might think bitcoin prices would rally $2,000 on the findings considering the original report that implicated tether and Bitfinex crashed prices by $2,000.
But alas, that is not how the crypto markets work.
Fear sells!
The most likely reason for the increase in tethers as prices were falling was due to people selling out of bitcoin and opting in to a stable coin like tether in order to preserve profits.
Which is exactly what you would expect people to do.
The next time someone tells you that bitcoin is all a scam and that tether is artificially supporting prices, point em to this report.
Stay informed my friends.
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If you deny both market rig and Chinese money fleecing from China as causes/explanations, what do you think is the cause for the huge USDT creation when it happened?
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So Bitcoin is not tethered to Tether? 🤪💰🤪
It appears it is not.
now i know, i thought it was tether to btc... the name it self is confusing.
Glad ol @corndog could help clear that up for you. :)
Finally can put the tether debate to rest. Nothing against tether but personally I've never found a use for stablecoins (except SBD ;).
There is a lot of use to it for big traders that trade on exchanges with no fiat ramps. Also people use it to hide out in while not wanting to incur tax liabilities when they go to fiat. Tax laws very by country.
I know it's use-cases, thanks... like I said, 'Personally' I have no use for it, rather exchange for fiat in an exchange enabled wallet like SpectroCoin for example. That way I can wire out fiat and/or reduce risk in crypto entirely.
In the rare circumstance that I may Need a stablecoin, I'll use SBD.
some people expect giving wrong information, about the bitcoin, we must be sure of what we do and we listen.
this is a great informations,
Toda la razón, así mismo es.
I dont think tether had any connections with btc cuz bitfinex themselves bought btc so why would they lower it
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The rumors were that they artificially supported/inflated it.
Interesting details provided which in most part I agree with. Though some correlation can be perceived, the actual proof is tough to see and most importantly repeat as we have seen this year. As more assets target to take Tether market share in the stable coin sector, more of this divergence will exist as Tether will lose its perceived power to move the market.
Yep, I agree. At some point there will be a coin that is more transparent than tether, but for now we have tether.
I new It! Usdt is solid.
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Certainly appears to be.
It's exactly what I would expect people "in the know" to do.
People with information that the rest of us did not have, for incidence.
Do you mean you would expect them to say that tether is a scam or do you mean that you would expect the scam to be covered up?
If Tether is a scam, it's a very bad scam as it really isn't very attractive to common crypto users... It has very high withdrawal fees and some exchanges even have ridiculously high entry requirements for Tether markets. To sum things up, it has very limited use outside or between exchanges.
Pienso que al bitcoin no lo van a parar nadie, es lo que va cambiar el mundo económico y nuestra libertad financiera. Se acabó el control bancario y de gobiernos.
I ♥ BTC
All altcoins have impact from Bitcoin!
Correct. Sometimes they up when bitcoin does and sometimes bitcoin sucks value out of them. Which one will happen the next time bitcoin goes up?