Cryptomarket proves immune to Tether influx

27 August, 2018

With another $500 million worth in new tokens issued in August and history linked to alleged Bitcoin (BTC) price manipulation, Tether (USDT) was carefully observed by market watchers anticipating the recent influx to cause cryptocurrency price swings. However, according to a report by blockchain research firm Chainalysis, the stablecoin is no longer able to have a major impact on the wider crypto market.

The Tether issue first came into the limelight when in December 2017 the US Commodities Futures Trading Commission (CFTC) subpoenaed the coin and associated cryptocurrency exchange Bitfinex, seeking proof that USDT is backed by a reserve of US dollars. Neither was accused of wrongdoing but the controversy persisted. A June paper published by researchers at the University of Texas claimed that the Bitcoin spike to nearly $20,000 late last year was the result of price manipulation orchestrated by Tether. As observed by Chainalysis and reported by Bloomberg on Friday, Tether also affected the movement of altcoins.

“While on-chain transaction activity was in decline for the major cryptocurrencies, traders were still seeing opportunities for profit with some of the newer, lower-volume cryptocurrencies,” the research firm noted, adding that “high volatility for low-volume Tether trading pairs is a typical sign of pump and dump activity.”

According to Chainalysis’ analysis, Tether’s pattern of behavior last year was linked to Bitcoin, Ethereum (ETH) and Litecoin (LTC) about 85% of the time. Following the crypto market crash in early 2018, this correlation faded drastically, with EOS (EOS) and NEO (NEO) the only coins to maintain a high correlation to USDT between January and June.

However, not even more than half a billion in new Tether has been able to affect the price of EOS and NEO in August. Bitcoin also seems immune to the USDT supply boost, with the original coin falling some 13% since the beginning of the month. Last year, the same amount of new tokens issued could have caused $500-$1,000 in BTC price fluctuations. This change in the trend may be indicating either a mature market or an overwhelming number of sellers, the analysts concluded.


Source link   Crypto currency: Tether


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