$500 Million In Tether (USDT) Issued During August, No Impact Felt On Markets
Despite an influx of over $500 million influx of Tether’s USDT tokens this month, the prices of either major cryptocurrencies and smaller altcoins alike have remained relatively unaffected.
Correlation between tether and price pumps
In the past, the movement of Tether has coincided with changes in Bitcoin, which has caused many to believe that the issuance of the USDT tokens is somehow connected to uptrends in the crypto market.
With the recent trends, the theory is not holding true given that over $500 (according to Omniexplorer) of the dubbed stable coin has been created and issued this month, which under normal circumstances should lead to a Bitcoin rally.
Instead of witnessing a crypto rally, Bitcoin has dropped even further this month (declining by about 19-22% this month), as the price of the coin remains well below $7,000.
Half a billion in Tether tokens has not been able to case a bullish outbreak in Bitcoin, or any other altcoin, as a great percentage of the crypto market remains without any substantial growth.
Controversial past of Tether
In the past, Tether has been linked to price pumps, which led to speculations that the project was involved in schemes to manipulate the prices of assets in the crypto market.
A paper put forth by the University of Texas in mid-June claimed that Bitcoin reached its all-time high of $20,000 following a price manipulation involving both Tether and crypto exchange Bitfinex.
The paper also reported that Bitfinex, the sixth largest crypto exchange is “the only direct client” of Tether.
To validate this claim, data from Omni Explorer shows the $500 million USDT tokens created this August were all sent to the Bitfinex exchange.
Besides accused of involvements in Bitcoin price manipulation, Chainalysis, a crypto research firm also claimed that Tether has been involved in efforts to manipulate prices of other smaller altcoins.
The research firm based in China claimed that during last year’s crypto bull run, Tether was linked 85% of the time to Bitcoin, Ethereum, and Litecoin.
However, a recent research (between January and June) carried out by Chainalysis claims that as the crypto market experienced downfall earlier this year, Tether was associated more with smaller altcoins like EOS and NEO tokens.
Tether and Bitfinex challenged
Despite the movement of Tether coinciding with changes in the price of Bitcoin, and other allegations levied against the stable-coin, the cryptocurrency exchange has denied manipulation of any sort, stating:
“Bitfinex nor Tether is, or HAS ever, engaged in any sort of market or price manipulation. Tether issuances cannot be used to prop up the price of bitcoin or any other coin/token on Bitfinex.”
To clear the name of the firm, Tether has asked Freeh, Sporkin & Sullivan LLP (FSS) to perform an independent and fair audit into the company’s bank accounts.
Tether also asked FSS to randomly inspect Tether’s reserve of the U.S. dollar, as well as the circulating USDT tokens.
After performing the audit in the manner Tether demanded, FSS issued a statement saying:
“FSS is confident that Tether’s unencumbered assets exceed the balance of fully-backed USD Tethers in circulation as of June 1st, 2018.”