Contrary to the somewhat-popular idea that tether (USDT) issuance is used to manipulate crypto markets by boosting the price of bitcoin, a new academic study by researcher Wang Chun Wei of the University of Queensland Business School shows that the most widely-used stablecoin in fact has a negligible effect.
Tether and the 2017 Bitcoin Price Rally
Titled “The Impact of Tether Grants on Bitcoin,” the report examines the tether-bitcoin price manipulation theory using a Value-at-Risk (VAR) model to establish conclusively that while there is a positive correlation between USDT grants and bitcoin’s trading volume, this does not lead to any significant bitcoin price movement.
In July, CCN reported that researchers from the University of Texas claimed that market manipulators used Tether’s USDT token to artificially inflate the bitcoin price during its prolonged 2017 bull run. In the 66-page report, Professors John Griffin and Amin Shams argued that tether has been repeatedly used to provide price support for bitcoin during market downturns.
Using the VAR model however, the new study debunks these claims, stating that no empirical evidence could be found to support claims of a positive correlation between USDT grants and the 2017 bitcoin price rally.
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