[2018-07-01] Abnormal Tether price moves in Kraken leave analysts puzzled

[bbc.reporter]

Does anyone know if Kraken is authorized to issue new Tether USDT during periods of increased demand to maintain the $1.00 = 1 USDT peg?

Also, how did the people behind this investigation know that those automated sell walls were not from newly issued USDT? Do they have permissioned entry inside Kraken's back office? Can it be seen in the blockchain?



The study cited data between May 1 and June 22 of 56,000 different USDT trades on Kraken and found repetitive orders of unlikely similarity. Curiously specific trades, such as one for 13,076.389 Tethers, were among the most frequently ordered amounts on Kraken during the evaluated time period, leading researchers to conclude that the orders were produced by “automated trading programs.”

On May 9, eight consecutive sell orders, each in the amount of 13,076.389 USDT were filled over the course of 16 seconds without changing the price of Tether in the slightest. Against logic, the following trade of just 75 USDT nudged the price up by $0.0001.

Instead of organic price equalization through a process of supply dilution, we are seeing prices immediately controlled back to $1 by the trading bots following any slight fluctuation. More information is needed to substantiate the allegations of manipulation, but the circumstances are certainly raising alarms.

Read in full http://bitcoinist.com/abnormal-tether-kraken-analysts/

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[gentlemand]

It's only Tether that can issue anything.

This 'scoop' has been universally derided since it came out - https://blog.kraken.com/post/1664/on-tether-journalists-defy-logic-raising-red-flags/

https://www.reddit.com/r/CryptoCurrency/comments/8ut4xv/bloomberg_extensively_analyzes_tether_volume_on/e1i9azx/

[bbc.reporter]

@gentlemand. That is a good explanation by Kraken. Also, if the peg remains stable on $1.00 = 1 USDT, then that would show that the idea behind USDT is working.

Maybe the journalists are spreading FUD again paid for by the central bankers hehe. They know what's next if Tether grows in marketcap.

[1Referee]

@gentlemand. That is a good explanation by Kraken. Also, if the peg remains stable on $1.00 = 1 USDT, then that would show that the idea behind USDT is working.

Maybe the journalists are spreading FUD again paid for by the central bankers hehe. They know what's next if Tether grows in marketcap.

There is definitely a massive amount of fud spreading happening, but we can't ignore the fact that USDT is not doing what it is supposed to do. So no, the idea behind it isn't working.

Plenty of exchanges don't respect the peg and they don't have to because there is nothing pegging USDT to the USD other than the promise that Tether (the company) will buy back your tokens for $1 per unit.

The main thing that made USDT lose its purpose of existance is that exchanges started listing USDT/USD pairs. Why on earth would you trade $1 versus $1? Bitfinex doesn't have a USDT/USD pair because they know it would ruin USDT, but they can't prevent other exchanges from doing it. Nothing prevents me from slowly buying up all USDT at an average of $0.95 and sell them back to Tether for $1.

On WEX you only need USDT 467,000 to dump the price down to $0.925. What if that dump triggers stop loss orders taking the price down to $0.75 or something? It's a tradable asset and not a stable coin. This whole Tether offers great utility theoretically, but not so much when it comes to real world use.