Is Tether Supply a driver of Bitcoin Prices

[timerland]

Been seeing so many different articles on this. Charts show a strong correlation in supply of tether with rise in BTC prices. Is Tether supply and trading a significant driver of Bitcoin prices in 2019 up from $3k level in Dec 2018? If so, how much really [estimates with precision]? And what happens to Bitcoin prices if there's a Tether crackdown or if some other really bad news about Tether hits the newswires?

I certainly don't see a strong correlation between the two at all - even though it has been argued by many others that there is.

I wouldn't discount the possibility that printing Tether out of thin air is contributing to certain rallies either, though. But that's not the main underlying reason of these bull and bear markets, in my opinion, because that would still be attributed to the natural market cycles that imminently occur.

Think about it - even if Tether's supply increased during the bear market, where sentiment is extremely bearish, would it really have an impact and all of a sudden reverse the long term trends completely? No. The main driver of that is people's expectations given the halving, how prices consolidated at $3k for a significant amount of time, as well as institutional interest.

To answer your other question, I do think that a tether crackdown will detrimentally effect BTC prices in the short run due to trader's reliance on it as a fiat replacement on exchanges. But in the long run, I doubt it'll hinder its growth.

[Febo]

Is Tether Supply a driver of Bitcoin Prices

Tether supply = fiat money that was invested in crypto.     How on earth would that not influence price of Bitcoin? When tether supply will start decreasing and fiat will start going back out of crypto price of Bitcoin will start reducing.  Of course tether is not only way that fiat enters crypto other exchanges then Bitfinex just simply takes it and charge your account, not telling whole world as Bitfinex does who much fiat you gave them.

Febo: do you really deep down believe Tether is not a hoax?

Do you deep down inside you believe that Bitstamp, Kraken and Coibase actually received all fiat that was deposited by people on their exchange?  Most likely they make all that up and are crediting people for free, just so those people can buy Bitcoin and inflate its price.  Tax they pay for that is just a tiny price for all the profit they get from their hoarded piles of Bitcoin.  Without that price of Bitcoin would be probably less then a dollar.    You really believe them?

[Pursuer]

no it is not "driver" of bitcoin price because to be that you are basically suggesting that Bitfinex has been printing USDT and buying bitcoin with it themselves! the problem with that logic is that there is going to be no profit in doing something like that for their company unless they dump bitcoin for fiat and it has been years (7 or 8 years?) that tether has been around and we have not seen anything like that.
you can't just have a half cooked theory either. you have to come out and say it, if you think bitcoin price is manipulated on this scale then you must also explain why it has not been dumped for 10 years and still continues rising?

[el kaka22]

I think it is not a driver of bitcoin but it kind of has something amazing that helps bitcoin prices that nobody talks about. Now think about what we did for fiat currency back when tether didn't exist? Some people used exchanges to keep fiat currency on their exchanges, some people withdraw completely to their banks, some even cashed out via ATM or localbitcoin ways as well.

It means before tether was a thing there was plenty of people that actually got out of bitcoin completely and that created an issue of going back in and some didn't went back in because they spent the money as well. Now, thanks to tether you do not need to remove your money from the exchange for it to be a fiat, you can keep it on usdt and makes going back into bitcoin so much easier, which probably helped out a bit. I dislike tether but I can't deny its help.

[exstasie]

Tether supply = fiat money that was invested in crypto.     How on earth would that not influence price of Bitcoin?

do you really deep down believe Tether is not a hoax?

I don't think it is. Tether is very shady and has probably been breaking various laws for years but they aren't a scam or a hoax. Looking through the NY v IFINEX/BFXNA proceedings, it seems obvious that Tether and Bitfinex move many millions of dollars on behalf of trading firms.

no it is not "driver" of bitcoin price because to be that you are basically suggesting that Bitfinex has been printing USDT and buying bitcoin with it themselves!

Maybe not themselves per se. Here are some interesting tidbits worth pondering:
https://twitter.com/BennettTomlin/status/1148424564826943489
https://twitter.com/BennettTomlin/status/1148413875118858240

[BitHodler]

Now, thanks to tether you do not need to remove your money from the exchange for it to be a fiat, you can keep it on usdt and makes going back into bitcoin so much easier, which probably helped out a bit. I dislike tether but I can't deny its help.

It is definitely helping when it comes to keeping capital inside the crypto market, but that's not entirely because of people not seeing a reason to withdraw fiat, but more so that they can't withdraw.

The only way to withdraw fiat is to sell your USDT to Tether/Bitfinex. If you take into consideration that most holders of USDT are likely not those who injected it in the ecosystem, you'll see why they can't withdraw fiat.

I totally wouldn't feel comfortable sitting in USDT for a long period of time. I get its utility in being an easy to move fiat alternative for traders and investors, but the aftertaste is horribly sour.

[adaseb]

Now, thanks to tether you do not need to remove your money from the exchange for it to be a fiat, you can keep it on usdt and makes going back into bitcoin so much easier, which probably helped out a bit. I dislike tether but I can't deny its help.

It is definitely helping when it comes to keeping capital inside the crypto market, but that's not entirely because of people not seeing a reason to withdraw fiat, but more so that they can't withdraw.

The only way to withdraw fiat is to sell your USDT to Tether/Bitfinex. If you take into consideration that most holders of USDT are likely not those who injected it in the ecosystem, you'll see why they can't withdraw fiat.

I totally wouldn't feel comfortable sitting in USDT for a long period of time. I get its utility in being an easy to move fiat alternative for traders and investors, but the aftertaste is horribly sour.

Pretty sure that 99% of people or at least all the small retail traders don't send their Tether to Tether.io and do a withdraw into their bank account.

Most people send their Tether to an exchange, buy BTC, and send that BTC to an exchange where they sell for fiat like Gemini or Coinbase.

The fees add up taking these steps but I am pretty sure most don't care since BTC did 300% gain this year, so an extra 1% in trading fees doesn't bother most people.