It is no secret that the largest stablecoin in the crypto market, Tether (USDT), is linked to the largest cryptocurrency, Bitcoin (BTC). However, recently, it has become clear that USDT contributes to Bitcoin’s performance in more ways than previously believed.
In fact, researchers believe that the stablecoin might be the biggest contributor to Bitcoin rallies, and especially the one that took BTC prices to its yearly high earlier this year. Bitcoin’s price was closely monitored on days when new Tether tokens were issued, and researchers suggest that BTC surges at least 70% of the time when new USDT gets released into circulation.
With that in mind, a massive surge from earlier this year comes as no surprise, considering that Tether issued around $2 billion in USDT.
Tether was meant to act as a way to bring more liquidity to the cryptocurrency market. which was necessary as the exchanges were not able to provide banking services at the time due to concerns of illegal use of digital currencies. Tether came as a solution, although controversies came along with it.
Earlier this year, in April, New York’s Attorney General accused the firms that issued Tether of covering up losses through the use of the coin. It is also believed that USDT is used to meet orders from large customers that wish to enter the crypto space without leaving a trace. This is especially used in China, where crypto exchanges are banned, and where USDT can be purchased via paying cash over the counter.
Do you use Tether? What do you think about its influence on Bitcoin? Let us know your thoughts in the comments below.