Tether Behind Bitcoin’s $4000 to $13,800 Bull Rally: Analyst

Tether Behind Bitcoin’s $4000 to $13,800 Bull Rally: Analyst

A crypto Twitter analyst believes that Tethers USDT issuances are the real catalyst of the Bitcoin price bull move from $4,000 to $13,800.

Bitcoin is not “Sound Money”

Earlier this week twitter personality Andrew Rennhack suggested that Bitcoins explosive rally from $4,000 to $13,800 was primarily fuelled by Tether printing a vast amount of USDT. According to Rennhack, Bitcoin is not sound money as the entire cryptocurrency market is backed by unaudited Tether which has the top 24-hr trading volume.

Humorously, Rennhack claims that Tethers USDT issuance rate would make even the FED blush. Rennhack is of the opinion that there is no reasonable explanation for Bitcoins huge bull run, and he disregards the frequent talking point that institutional investors rushed to buy BTC as a hedge against stock market volatility.

A Long Running Conspiracy

Rennhack isnt the first person to suggest that Tethers increasing market cap directly impacts Bitcoin price action. A number of market analysts and scholars have reached similar conclusions since the end of 2017s monster rally.

Since the start of June, more than $750 million worth of USDT were minted and this issuance closely aligns with Bitcoin meteoric rise to $13,800.

Ethfinex founder, Will Harborne explained that:

When you see a large Tether print it means a handful of wealthy clients have essentially preordered batches of Tethers, days in advance, to then dump on the marketoften before it’s begun to surge. Buying significant amounts of USDT also allows whales to make trades on deeply liquid crypto exchanges that do not transact in fiat currencies.

Wealthy investors are required to order a minimum of $100,000 worth of Tether in order to make purchases directly from Tethers website.

The wider crypto-community is made aware of these transactions through a cryptocurrency tracking bot called WhaleBot. The bot reports large transfers and transactions and investors track these movements and speculate whether the crypto market will respond in a bearish or bullish manner.

In June, 600 million USDT were minted and as these coins dripped into the market Bitcoins price rose from $8,500 to $11,000. Harborne believes that this single example is proof that Tether printing leads to speculation and bullish Bitcoin price action and he points to research that supports this conclusion.

Not Everyone Agrees

A few Twitter followers openly disagreed with Rennhacks supposition and Nick Core suggested that:

Regardless of Tether and its issues which I dont contest, you cannot say factually that this is the cause of BTCs rise without comparing Tether inflows to the dollar. A market cap rise in USDT from 1.8B to 4B does not logically explain BTCs rise in cap from $56B to $198B. FUD

Research from a 2017 JP Morgan report appears to support Rennhacks estimate. The report found that the total crypto-market cap had a multiplier effect of 50x.

In 2017 JP Morgan estimated that nearly $6 billion in fiat currency was invested into cryptocurrencies, which resulted in a total crypto-market cap of $300 billion.

According to Rennhack, $2 billion worth of USDT has already been printed in 2019 and Bitcoin currently comprises 67% of the entire crypto market. 2 * 50 * 0.67 = 67 billion in fake market cap added to BTC YTP which matches the actual number quite closely.

Bitcoin’s Market Cap Follows Tether’s

Another interesting chart comparing Tethers market cap to Bitcoins market cap has been making its way around the internet.

Close observation of the chart shows that Bitcoins market cap has a tendency to lag behind Tethers.

As of today, Bitcoin has not caught up to Tethers increases and some analysts believe that this supports a bullish case for Bitcoin over the short-term.

The Plot Continues to Thicken

Many people believe that Tethers peculiar method of injecting USDT into the crypto market is nothing more than market manipulation. The New York Attorney Generals office is clearly in this camp and most recently Tether has been embroiled in a lawsuit alleging that Tether and Bitfinex illegally operated in the state of New York.

Bitfinexed, a crypto-blogger who has closely followed Tethers activity for years, believes:

Bitfinex issues tethers to their traders for market manipulation, market manipulators pump and dump, then pay for the tethers later.

Late last week the New York Supreme Court judge overseeing the case postponed issuing a decision on the case so it will be a while before the community gains a deeper insight into the matter.

Do you think Tether intentionally manipulates the cryptocurrency market? Share your thoughts in the comments below!

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The post Tether Behind Bitcoin’s $4000 to $13,800 Bull Rally: Analyst appeared first on Bitcoinist.com.

07.08.2019 / 00:10 57
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