The chain analysis confirms that the new issue of Tether (USDT) could dampen the upward trend of Bitcoin (BTC). The company’s chief economist Philip Gradwell said in a weekly newsletter for Market Intel:
With the newly released tether, which is available on the exchanges, Bitcoin can be bought as often as with the current tether. However, this distinction shows that in the current market, if no new version of Tether hits the exchanges, Fiat will drive the buying of Bitcoin to a greater extent, as the difference between the yellow and pink lines shows.
Gradwell hypothesized that the price change is mainly influenced by the influx of fiat currencies into the market: “Currently, the data suggests that the current price increase is being driven by the demand for money.” He therefore concludes that more fiat currencies would have hit the market if Tether hadn’t made new coins. While this may be true, it is also possible that at least some buyers who buy Bitcoin using Tether have used other stable currencies or have moved out of the way entirely.
According to company data:
Last year, the value of Tether posted on exchanges accounted for 48% of the Bitcoin value posted on exchanges. So there was enough tether to buy almost half of the bitcoin for sale.
Gradwell concluded that the other half must have been acquired through some monetary order, arguing that the role of the other Bitcoin trading pairs was negligible. The allegations were previously collected against Bitfinex and Tether and accused of manipulating Bitcoin prices.