Connect with us

Altcoins

“Is Bitcoin [BTC] really Un-Tethered?” – John Griffin and Amin Shams

Ranjitha Shastry

Published

on

"Is Bitcoin really Un-Tethered?" - John Griffin and Amin Shams
Source: Pixabay

Tether [USDT], one of the most traded cryptocurrencies supported by platforms like Bitfinix, ShapeShift, Bittrex, and Omni, shows an indication of being spent on Bitcoin in its critical moments, according to research by a University of Texas professor.

Bloomberg's Tweet about the research paper | Source: Bloomberg Twitter page

Bloomberg’s Tweet about the research paper | Source: Bloomberg Twitter page

Finance professor John Griffin and co-author Amin Shams wrote in a paper released Wednesday:

“Tether seems to be used both to stabilize and manipulate Bitcoin prices,”

John Griffin and Amin Shams, in their research article, ‘Is Bitcoin really Un-Tethered?’ aim to investigate the relation between Bitcoin, other cryptocurrencies, and Tether, a cryptocurrency purportedly clinched to the U.S. dollar that carries more transaction volume than dollars. They also set out to understand how the 2.5 billion Tether coins in actuality have gone along in the markets.

While there is little public information on about how Tether was created, it generally exchanges for around $1 as each coin is supposed to be backed by $1 of fiat money in a bank. The currency is plunged as a stable alternative to Bitcoin’s levity, acting as a harbor for crypto investors.

They state in their abstract:

“We investigate whether Tether is primarily demand-driven from investors, or supply-driven by Tether issuers pushing the currency on the market. Due to the semi-transparent nature of the blockchain, we are able to use extensive algorithms to lump nodes of investors and match transactions on the Tether Blockchain to those on the Bitcoin Blockchain.

What is interesting is that Griffin and Shams’s paper describes Tether as being primarily used by Bitfinex, a major crypto-exchange, to purchase Bitcoin tokens from two other exchanges and most importantly did this only after periods of Bitcoin price declines. They set out to know how less than 1% of hours with heavy Tether activity can explain almost half of the meteoric rise in Bitcoin.

They mention:



“consistent with some pressure to maintain dollar reserves only at the end of the month, Bitcoin prices are significantly negative on the last day of the month, but only in months with large Tether issuances.”

With intentions to investigate the price outsets of Tether to Bitcoin, they choose the sample of 87 of the largest purchases of Bitcoin with Tether from March 2017 to March 2018. In this regard Griffin said:

“strongly increase just below multiples of 500. This pattern is only present in periods following printing of Tether and not observed by other exchanges. If it was the random behavior you wouldn’t see it cluster around the thresholds, It indicates it’s a conscious strategy to provide price support.”

Griffin and Shams added:

“Overall, the findings indicate that Tether is closely linked to Bitcoin price appreciation, and question the purpose of Tether.”





Subscribe to AMBCrypto’s Newsletter




Follow us on Telegram | Twitter | Facebook



Ranjitha Shastry is a part of AMBCrypto's News Reporting Team. Having done her major in Journalism and mass communication, she is passionate about business and economic journalism.

Altcoins

Binance Coin surges by 9% in 24-hours after DEX announcement; breaks out of ‘saucer bottom’ pattern

Avatar

Published

on

Binance Coin surges by 9% in 24-hours after DEX announcement; breaks out out of 'saucer bottom' pattern
Source: Unsplash

Binance Coin [BNB] is nothing short of becoming the best performing crypto asset of 2019, as it creates higher highs every day. In a recent surge, BNB went up by approximately 12% in 24-hours breaking out of the ‘saucer bottom’ pattern.

BNB has been on a bull run since December 2018, it has surged by approximately 470% since that point. In the last 24-hours, the price was up by approximately 12% from wick-to-wick.

Source: TradingView

Moreover, the rise in the price over the day can be attributed to the announcement by Binance DEX, that was launched recently. The tweet read:

The new update will convert the BNB, which is an ERC20token, into BEP2, it will be called the “mainnet swap”. Furthermore, users have to convert their ERC20 tokens on Binance, the details of which will be released in the near future.

In addition, Mithril, a cryptocurrency project has announced that it will be the first project to migrate to the Binance Chain. It tweeted:



“$MITH token holders on the new @Binance_DEX will be the first to experience increased speed, security, and user friendliness while maintaining full control over their funds.”

A Twitter user, @carlitosblvd123, commented:

“So , all BNB we have now like erc20 in binance exchange and on trust wallet will be converted to bep2 automatically or we have to do anything to happen?”

@jigneshon, another Twitter user commented:

“Crypto Revolution will happen on 23rd April when Binance Chain Genesis block will be created. 🔥”





Subscribe to AMBCrypto’s Newsletter


Continue Reading

Trending