Latest research that has been conducted by Ph.D. Wang Chun Wei concluded that there is no evidence that the USDT was used as a tool to manipulate Bitcoin (BTC)’s price back in 2017.
The study is called The Impact Of Tether Grants On Bitcoin, and it has been written in May 2018 and used as a VAR model in which the price of BTC could be correlated with the availability of USDT in the market.
Wang Chun Wei was trying to find out if there was a valid relationship between the price of the BTC and the issue of USDT.
There is no relationship between Tether and Bitcoin
According to the results, contrary to the expectations of many, the study didn’t find a relationship between these two assets.
On the other hand, it did show that the issuance of Tether has been correlated with an increase in the trading volume of both cryptos.
Chung Wei said that there has been a ton of skepticism in the crypto community over the world’s biggest stablecoin, Tether.
“Our paper does not examine whether the newly issued Tether coins are indeed backed by US dollars or not, but by utilizing an unrestricted VAR, we examine the impact of these cryptocurrency issuances on subsequent cryptocurrency price.”
He concluded by saying that “In conclusion, we do not find any evidence suggesting that Tether issuances cause subsequent increases in Bitcoin returns. However, we do find that Tether issuances are highly autocorrelated and cause subsequent increases in Bitcoin (and Tether) trading volume over the short term.”
The results provided by this research are clashing with other results of a study run by John Griffin of the University of Texas who concluded that BTC’s surge was an artificial process caused by excessive emissions of USDT to prevent any critical bearish correction.
Anyway, it seems that Bitcoin’s price surge might have occurred naturally.