Chainalysis suggests that the new release of Tether (USDT) may dampen the bull run of Bitcoin (BTC). In a weekly Market Intel newsletter, chief economist of the company Philip Gradwell said:
Newly issued Tether arrived at exchanges can be used to buy Bitcoin just as existing Tether can be. But making this distinction shows that fiat in today’s market fiat bitcoin purchase would run to an even greater extent if no new Tether issue had arrived on exchanges, shown by the difference between the yellow and pink lines.
Source: Chainalysis Market Intel Newsletter.
Gradwell stated that the price change was most affected by the influx of fiat into the market: “At present, the data suggest that the current price increase is driven by demand for fiat.” So he concluded that if Tether had not made new coins, more fiat would have entered the market. While this may be true, it is also possible that at least some of the buyers who buy Bitcoin with Tether would have used other stablecoins or just stayed away altogether.
According to company data:
In the last year, the value of Tether sent to exchanges was equal to 48% of the value of Bitcoin sent to exchanges. That there was enough Tether to buy almost half of Bitcoin.
Gradwell concluded that the other half should be obtained with fiat, arguing that the role of the other Bitcoin trading pairs was insignificant. Violations were previously filed against Bitfinex and Tether, accusing them of manipulating price of Bitcoin.
