A new research has again put Tether in a bad light blaming it for influencing Bitcoin’s price in 2017, according to The New York Times on June 13.
John M. Griffin and Amin Shams of University of Texas circulated a paper suggesting a series of transactions were initiated where Tether was “used to provide price support and manipulate cryptocurrency prices.”
The paper alleged that Tether and Bitfinex were responsible for half of Bitcoin‘s record high price of approximately $20,000 in December 2017.
The paper’s abstract says, “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.”
The perceived strategic release of coins into the market influencing Bitcoin’s price has gotten Tether into trouble with regulators and has been subjected to investigations since last year.
Mainstream media was quick to pounce on the researchers’ theory to show that Bitcoin markets are not as transparent as hyped.
The study is “likely to stoke a debate about how much of Bitcoin’s skyrocketing gain last year was caused by the covert actions of a few big players, rather than real demand from investors,” the New York Times reported.
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