For quite a long time, the adoption of Bitcoin is increasing around the world. In this adoption process, the stablecoins like Tether has come out as a beneficial commodity for Bitcoin. A few years ago, Tether had been permitted to access Bitcoin, although it grew suspicion, still, this connection brought in a lot of good in the crypto world.
Crypto Price Not Affected By Tether Issuance
Recently, the new episode of the On the Brink podcast has been broadcasted, this time the guest was Ganesh Vishwanath-Natraj, an Assistant Professor of Finance at Warwick Business School. The Professor, while sharing his views on Bitcoin and Tether, claimed that the researchers do not find a statistically significant relationship between the circulation of Tether and the price of Bitcoin.
Therefore, it could be said that issuance of Tether could not affect the price of crypto assets present in the market.
Natraj along with Richard K Lyons, published a research paper “Stable coins don’t inflate crypto market”. Prepared on hypothetical events the study argues, “Issuance behaviour can be explained as maintaining a decentralized system of exchange rate pegs and acting as a safe haven in the digital asset economy”.
Tether Market Cap Syncing With Rising Bitcoin Price
A few days ago, the circulation of Tether was continuously growing in the market but in some cases, the price of Bitcoin remained sideways to it.
Recently, Skew collected the data of the past few months and explains that market capitalization of Tether has been moving in sync with the increasing price of Bitcoin.
According to the research done by Skew, at the time of crisis, a few numbers of investors would choose to shift to better store value and for this Tether and other stablecoins are the best options.
Natraj mentions that whenever a large investor wants to rebalance its portfolio as a vehicle currency, then they would use Tether.
He claimed that although the issuance of Tether does not affect the crypto market, still the crypto investors use it for transactional demand purposes.
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