Tether (USDT): Cryptocurrencies’ Headache or Worst Nightmare?

in #cryptocurrencies6 years ago

tether-mints-250-mln-of-new-usdt-tokens-rekindles-controversy1[1].png

This news came out last evening. Below, there is a link to a research paper that shows market manipulation with Bitcoin (BTC) prices during 2017, through the use of Tether (USDT). For those who are not familiar with USDT, Tether is a cryptocurrency that originated from the cryptocurrency exchange Bitfinex. USDT is pegged to the dollar and each Tether is supposed to be backed by one dollar of US fiat currency. In other words, Bitfinex and the issuers of this cryptocurrency are supposed to have one US dollar for every USDT they issue in the market. Throughout 2017, many people in the crypto space speculated that Bitfinex was printing Tether without adequate fiat in their bank account to back their USDT issuance.

With all the above in mind, the below linked academic study shows that the inadequately fiat supported issuances were used to prop up Bitcoin prices during every market downfall that occurred last year. In other words, USDT was used to create artificial support levels, leading crypto investors/speculators to believe that BTC price levels could not go below certain price points.

This was something that many in the cryptocurrency space were well aware of. There were quite a few of my colleagues and Crypto Influencers that noticed how BTC prices skyrocketed to higher levels, subsequent to each new Tether issuance. Some people in crypto say that regulation is not good for cryptocurrencies, but this is a case where regulation can actually benefit the space.

Here is the link to the academic study: Click Here

Sort:  

Congratulations @henryk81! You have received a personal award!

1 Year on Steemit
Click on the badge to view your Board of Honor.

Do not miss the last post from @steemitboard!


Participate in the SteemitBoard World Cup Contest!
Collect World Cup badges and win free SBD
Support the Gold Sponsors of the contest: @good-karma and @lukestokes


Do you like SteemitBoard's project? Then Vote for its witness and get one more award!