Tether to Force BTC Price Jump, Research Says

New research is called 'Is Bitcoin Really Un-Tethered?' and is conducted by John Griffin, professor of finance at the University of Texas, and Amin Shams
14 June 2018   597

The authors of the new study argue that the bitcoin rate was manipulated by the issuer of Tether. 

Using algorithms to analyze the blockchain data, we find that purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices. Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies.

'Is Bitcoin Really Un-Tethered?' Research

Researchers John Griffin, who is a professor of finance at the University of Texas, and Amin Shams analyzed data from the CoinAPI, Coinmarketcap.com, Blockchain.info, Omniexplorer.info and CoinDesk portals, using algorithmic analysis techniques to establish the relationship between transaction flows and cryptocurrency prices.

From March 1, 2017 to March 31, 2018, the actual Bitcoin price rises from around $1190 to $7000 for a 488% return. In contrast, the price series without the 87 Tether-related hours ends at around $4100, a 245% rise. Hence, the hours with the strongest lagged Tether flow, which account for less than 1% of the time-series, seem associated with 50% of the Bitcoin buy-and-hold return over the period.

'Is Bitcoin Really Un-Tethered?' Research

The study also says that Tether's influence is not limited to the bitcoin market alone.

The percentage of the buy-and-hold return that are attributable to the Tether-related hours range from 42% for Dash to 82% for Zcash. Ethereum, for example, experienced near 2400% return during this period, while it would alternatively experience around 900% return if the Tether-related hours were excluded. Across the six other crypto currencies, returns are 64% smaller on average when removing the 87 Tether-related flow hours.

'Is Bitcoin Really Un-Tethered?' Research

Analysts do not pretend to the accuracy of calculations, but argue that in the periods after the release of Tether or moving them beyond the Bitfinex exchange, certain regularities are traced. 

The suspicions that Bitfinex and Tether can influence the price of bitcoin have long existed in the community. In January, it became known that the Commodity Futures Trading Commission (CFTC) was conducting its own investigation in a case involving two companies. After the appearance of this news, Tether hadn't print its tokens for several months, but in March it issued 300 million USDT, and in May - 250 million more. Recently, the CFTC refused to answer questions about the progress of the investigation.

Tether has long promised to provide audit of USDT, however it has not done so yet, forcing market participants to guess how much the growth of the bitcoin price was provided by printing of unsecured tokens if such an activity generally took place.

Ex-Tether Top Manager to Launch Stablecoin Clearinghouse

Stablehouse.io will help to exchange stablecoins at a liquid market price with a fixed fee
06 February 2019   145

The XBTO crypto-financial platform together with ex-Bitfinex and Tether manager Philip Potter are working on creating a clearing service for stablecoins, Stablehouse.io. It is reported by CoinDesk.

The service will allow to exchange stablecoins at a liquid market price with a fixed commission. USDT, GUSD, PAX, TUSD, USDC and DAI will be supported.

The stablecoin market at the moment is inefficient and has various disparate stablecoins, with users needing to transact several times with different parties to exchange one stablecoin for another. Stablehouse will address this by serving as a centralized platform that gives issuers, holders and exchanges certainty over access and liquidity, creating enhanced confidence for investors, developers and merchants.

Philippe Bekhazi
Founder, XBTO

Together with him, David Namdar, a founding partner of Galaxy Digital and SolidX Partners, will join the advisory board of the company, as well as the lead strategist of Blockstream Samson Moe.

In the near future, the founders of Stablehouse intend to obtain a license from the Bermuda Monetary Authority.