Tether (USDT) Stablecoin Doesn’t Affect Bitcoin (BTC) Price, But Influences BTC Trading Volumes

The stable cryptocurrency Tether (USDT) has no impact on the price of Bitcoin (BTC), but it doesn’t affect its trading volume, according to the results of the latest academic research conducted by Professor Wang Chun Wei, of the School of Business at the University of Queensland, Australia.

Tether (USDT) has nothing to do with Bitcoin (BTC) price surges

According to the results of the study, which will be presented in the October 2018 edition of Economics Letters, there is no evidence to suggest that Tether (USDT) emissions cause Bitcoin (BTC) price surges.

The new study contradicts previous research that the stablecoin was manipulating the cryptocurrencies market, leading to the significant surge of Bitcoin (BTC) in December 2017.

Wei’s findings, focused mainly on market valuation and efficiency, used the vector autoregression (VAR) model, which serves to investigate whether or not there is a causal relationship between something in the past and something in the future.

The study was thus based both on the daily information on the commercial activity of USDT and BTC and on data from Omni Explorer, which lists all the addresses of new USDT issues.

Tether (USDT) is, however, influencing Bitcoin (BTC) trading volumes

“We found a positive relationship between Tether’s concessions and the increase in trading volumes the following day. Our VAR estimates show that both Bitcoin (BTC) and Tether (USDT) trade increases after Tether’s subsidies. However, these increases in trading volume do not lead directly to increases in Bitcoin (BTC). The effect is short-lived, and trading volumes return to normal in 5 days,” said Wang Chun Wei.

These findings largely coincide with a report published by Oleksandr Ivanov, a data scientist at the University of Groningen, the Netherlands, who also found that there is no correlation between the growth in the volume of circulating Tether (USDT) and the price of Bitcoin (BTC).

Jackson Bey

Jackson Bey was born and raised in Lethbridge Alberta but moved east when he was 22. Apart from running his own consulting firm. Jackson spends his time canoeing the many lakes of Ontario. As a financial journalist Jackson has published stories for CBC Business Online, as well as Buzz Feed and Motherboard. As a contributor to Billionaire 365, Jackson mostly covers markets and trade.

You might like

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.