Just a couple of days after we saw 7M Tether (USDT) tokens moved out from the Tether Treasury, another 4.5M has shifted out and into the Huobi exchange as of Thursday, September 5.
While the previous transfer was to an unknown wallet, we at least know this one is to the Huobi cryptocurrency exchange, thanks to a tweet from @whale_alert.
Another Bitcoin Pump?
— Whale Alert (@whale_alert) September 5, 2019
Another Twitter user, @soleil_dusoir9, believes what many have been saying about USDT for a while, that these movements are being used to pump Bitcoin’s price.
Another 5M USDT printed 🧐 https://t.co/Oz3KMT9ivb
— Soleil Du Soir (@soleil_dusoir9) September 5, 2019
This belief comes from the fact that Tether is one of Bitcoin’s most traded pairs, which makes some sense considering stablecoins are much more stable than Bitcoin or other cryptocurrencies due to their asset-backed state, be it USD or otherwise. That and the two digital assets appear to have ties with one another.
While it’s all speculation, it is widely believed that Tether is used to manipulate Bitcoin’s price. Taking a look at performance this year, we can see that the Tether’s average 30-day price movement is eerily similar to Bitcoin’s.
Tethered to Bitcoin
You see, Tether generally has a higher trading volume than Bitcoin, meaning that the stablecoin is being used more often than Satoshi’s asset to move money around. This is scary for cryptocurrency investors, as if Tether were to mint more tokens, they could technically push Bitcoin’s price upward. Whenever the minting stops, the Bitcoin price tends to stabilize.
So, there’s some reason to believe that this newest movement means more Tether is in the process of being minted, which could lead to a higher Bitcoin price sooner than we think.
A Department of Finance professor over at the University of Texas claims that Tether tokens are generated in chunks of around 200 million by Tether Ltd, in which a majority are then moved to Bitfinex.
What do you think about this latest move? Is Tether really able to manipulate Bitcoin’s price so well? Let us know your thoughts in the comments below! And while you’re at it, check out our guide on the best cryptocurrency exchanges for trading Bitcoins.
Images are courtesy of Shutterstock, Twitter.