Tether Has No Real Impact on Bitcoin price

[LeGaulois]

Do you remember the waves of people (including me maybe) saying some time ago that the price of Bitcoin is related to Tether (Is Bitcoin Really Un-Tethered?)

There is an academic study by a university researcher debunking the claims. It used VAR model (Vector autoregression) The study claims there is not any strong evidence between Thether and the Bitcoin's rally in 2017
https://www.ccn.com/tether-no-real-impact-on-bitcoin-price-university-researcher/

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[coolcoinz]

If you believe that tether and Bitcoin are unrelated what do you think would happen if an audit of Tether showed that there's much more USDt than USD? That millions of USDt was made out of thin air. We'd be facing another year of bear market and 5000 USD at the very least.
As long as tether keeps representing real dollars it will be fine and we can keep saying there's no relation but when it loses public trust all hell will break loose.

[Faeton]

Of course, the USDT coin should not influence the bitcoin rate. This is practically a digital copy of the dollar. The USDT coin is well used as a buffer when exchanging for another crypto currency, when there are no direct pairs for exchange, but it is most suitable for subsequent output to fiat. Also, it can accumulate funds as a reserve for subsequent investments. This is a very useful coin, but in itself it does not bring profit, because its rate as a whole always corresponds to one dollar.

[bitfocus]

USTD will have some effect on Bitcoin Price for a little while, as I think (crazy people ans conspiracy theories definitely impacts for a short while), but I strongly believe that BTC is strong enough to not to give a shit about that.

[mahibul49]

i already read this news.i think tether has connection on bitcoin price .i cant elaborate how tether connecting on btc price its just my opinion.

[MainIbem]

For there to be the kind of influence, USDT has to have to same or more popularity as BTC. As it stands for my view, fewer people know USDT. It is natural that the researchers concluded that there is no influence.

[dewildance]

I don't like Tether and other stable coins. I think there's no real benefits to the world of crypto money.

[jerrison]

the Tether is like a fiat in the crypto as it is based one a particular fixed price or rate which is one united states dollar. it is therefore a fact when said that Tether has no real impact on the price of bitcoin as it tends to adjust itself to the price of one dollar equivalent on the bitcoin satoshi.

[DenCho?]

I agree with guys above Who Ask what do you think Will happen if Tether collapse? A lot of huge exchanges work with it. Fortunately more and more go alternatives theese days (usd, tusd, gusd)

And don't you think that printed Tethers go to exchanges and buy btc, eth, eos and others pumping their price?

Also a lot of People think so, monitor Tethers emission and buy btc when they see another million of usdt came to the market

[randythered]

i don't believe that tether has much of a positive impact on the price of bitcoin but I do strongly believe that if tether were to collapse in the coming months that it would have a catastrophic influence on the price of bitcoin. I think it would be something akin to the Lehman brothers collapse that triggered a global financial crisis but limited to crypto.

[squatter]

I don't like Tether and other stable coins. I think there's no real benefits to the world of crypto money.

I'm not sure, but I think they might benefit overall liquidity and may even reduce volatility. If we compare USD stablecoins to USD exchange balances, I strongly suspect that the latter are much more likely to be withdrawn to a bank account. On top of that, stablecoins can inject liquidity into any market -- they're not relegated to any one exchange like a dollar balance at Coinbase.

When people talk about "money on the sidelines" that's exactly what USDT is. Assuming there's no funny business, an expanding Tether supply means increasing amounts of liquidity that aren't leaving the cryptocurrency ecosystem at all.

[Marcel666]

I agree that they ate totally unrelated.
It's probably a coincidence that the price of bitcoins rises when the supply of tether increases.
There are many valid factors that affects cryptocurrencies value, tether is not one of them.

[FlamingFingers]

For there to be the kind of influence, USDT has to have to same or more popularity as BTC. As it stands for my view, fewer people know USDT. It is natural that the researchers concluded that there is no influence.

How is it that fewer people know Tether while most of BTC|XBT/USDT traders always move their funds to USDT to avoid losing capital when the market is plummeting, especially that USDT is stable to mirror USD 1:1. Also, almost all top exchanges had BTC/USDT pair only for trading before moving to the implementation of USD market (even after that, BTC/USDT has more volume than BTC/USD on those exchanges, take Bittrex for example). Unless we are talking about average Joes/Jills here, I don't think Tether is any less known than Bitcoin among crypto members.

[pixie85]

I agree that they ate totally unrelated.
It's probably a coincidence that the price of bitcoins rises when the supply of tether increases.
There are many valid factors that affects cryptocurrencies value, tether is not one of them.

And what about the drops in the price of Bitcoin when they published that paper about pumps on tether. Later tether was audited but people were saying that it wasn't a full and thorough audit. At that time people were very fearful of a crash that could be started by tether. Even if we only count this psychological influence we'll be able to say that they are related.

[smartbitcoininvestor]

I'm fairly certain that Tether is tied to the USD which is tied to a host of other factors such as the interest rate, price of gold, housing market, stock market, inflation, etc

[BitHodler]

I'm fairly certain that Tether is tied to the USD which is tied to a host of other factors such as the interest rate, price of gold, housing market, stock market, inflation, etc

Seriously, you're overestimating Tether. It's nothing more than a token that should take away the inconvenience of actual fiat that's tied to KYC/AML policies forcing people using an exchange to verify themselves.

Tether in a way is similar to what paper gold represents. In both cases there is a promise that you can withdraw the underlying asset as per its stated value and quantity. If you discard the promise, it's just a token and that's it.

I'm not really in favor of these stable coins, but they do fill up an important role here, especially with how you can hedge a correction in crypto and easily move it to another exchange without being subject to legal shit.

[bbc.reporter]

@LeGaulois. The FUD from those 2 economists have been exposed, I reckon hehehe.

Also, I wish I can find the articles with the explanations on why more USDT were issued. Everyone needs to read them because all the replies show that they do not understand why more USDT was issued.

But to summarize those articles, they illustrated that more USDT are issued during the times when the price of bitcoin was going down because there was more demand for USDT. To maintain the peg of 1 USDT - $1, more USDT have to be issued. That's a simple summary, but the articles also expain the use of arbitrage.

[pooya87]

thanks for sharing this. the tether drama has been one of the biggest FUDs of last year and it has never made any sense at all, mainly because the whole theory had a lot of exceptions to it that defied the conclusion that it was trying to make.

But to summarize those articles, they illustrated that more USDT are issued during the times when the price of bitcoin was going down because there was more demand for USDT. To maintain the peg of 1 USDT - $1, more USDT have to be issued. That's a simple summary, but the articles also expain the use of arbitrage.

true. generally speaking new tether is issued whenever there is an increase in trading volume because there are more traders and since all of the altcoin exchanges have USDT pairs since they are avoiding fiat and the KYC that comes with it USDT is needed so that people can run away to it and/or use it to transfer funds between exchanges.

although one question rises here. we all know the market enters excited phases when there is a lot of volume (like end of 2017) but it exits them and enters slow mode with lower volume. what i wonder is how tether price remains up with a large volume in circulation but nowhere near the same demand?

[reflector]

I don't like Tether and other stable coins. I think there's no real benefits to the world of crypto money.

These are all not a profitable platform but this will be stable investment so it is one of the good technology in crypto industry. Nowadays all are expecting a decentralised platform but USDT is developing a crypto reputation because all the shopping stores are accepting the USDT in my area because of stable value so it will occupy the good marketcap in short period. So this will be a real impact of all the Cryptocurrencies.

[1Referee]

what i wonder is how tether price remains up with a large volume in circulation but nowhere near the same demand?

Tether's advantage is that the majority of the people are forced to hold it because they aren't in the mood to get actual fiat out by licking Bitfinex's ass.

It creates a situation where hundreds of millions worth of Tether is just patiently waiting on the side line to enter whenever people see an opportunity to do so. Most people can withdraw actual fiat through their exchanges, but with Tether the only way to exit is through Bitfinex, which is an exchange not many people have confidence in, and definitely not want to feed their personal information.

In that regard, Tether plays a more important role than most people here think. What would happen with the prices if everyone was freely able to cash out?