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Bitcoin’s price rises during Tether issuance in about 70% of the cases

Manu Naik

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Source: Pixabay

Stablecoin, USDT seems to be outperforming all the other cryptocurrencies as it surpassed Bitcoin Cash and took its place as the 4th largest currency by market cap on CoinMarketCap’s list of top hundred cryptocurrencies. However, the stablecoin is mostly in the news during the price fluctuations of Bitcoin.

The price of the king coin is often correlated with the issuance of Tether. However, a researcher from TokenAnalyst seems to proven the point in his latest calculations. The price of Bitcoin witnessed an increase of 70% during the days when new Tether tokens are issued. The 2019 surge in the value of Bitcoin, is also attributed to the issuance of $2 billion worth of USDT this year.

TokenAnalyst pointed out that issuance on the Ethereum blockchain as ERC-20 tokens noticed the price of Bitcoin soar 70% of the time (19 out of 27 cases), while issuance as Omni tokens encountered a surge 50% of the time (12 out of 24 cases).

Sid Shekhar, co-founder of TokenAnalyst wrote, in an email to Bloomberg,

“I think the discrepancies are appearing recently primarily because Tether on ERC-20 is just much easier than Tether on Omni to use as a means of transferring value quickly,”“Ethereum is a speedier chain than Bitcoin. As Tether is primarily used as a way to realize gains and get in and out of volatile crypto-asset positions in times of market movement, the speed of transferring into/out of it is critical.”

Furthermore, he asserted that traders would be able to leverage this knowledge by tracking the minting and burning of the ERC-20 Tether token.

Additionally, Analysts also discovered that the amount of Tether issued on Omni also had an impact on the price, with a correlation of -1.6%.

Previously in April, Tether and its parent companies were under the gun by the New York Attorney General for co-mingling client and corporate funds and clothing up losses. Tether has often asserted that it issues tokens impulsively to meet the orders from large companies.

Manu is a full-time journalist at AMBCrypto covering the US and Indian markets. A graduate in engineering, he writes mainly about regulations and its impact with a focus on technological advancements in the crypto space.

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Bitcoin

Bitcoin can reach $25K if usage crosses 1M people: Thomas Lee

Manu Naik

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Source: Unsplash

Managing Partner and Head of Research at Fundstrat Global Advisors, Tom Lee, recently made an appearance on CNBC‘s ‘Street Signs Asia‘ segment to talk about Bitcoin price movements in the future. Lee also spoke about why he thinks Bitcoin will touch $25K by 2022.

According to Lee, for an industry that’s over a decade old, these are still early days for digital assets. However, as time passes, it will become very institutional, he said. Fundstrat’s Lee added,

“Over time, it’s going to become an asset class, and once we hit that it’s actually another hockey stick.”

When asked about his prediction for the king coin’s price, Lee said that it had been established back in 2017 as a five-year prediction. According to him, the predicted goal would be easy to achieve due to cryptocurrencies being network value assets — the more people that hold it, the greater its value.

“In fact, it’s a log function, so if you double the users you get a quadrupling of value, and to go to $25,000 you essentially need a 4x rise (a little bit less than that) which means you need to double the number of people who hold Bitcoin.”

According to Lee’s estimates, there are under half a million people in the world who own and use Bitcoin widely today. He also compared Bitcoin to Internet stocks such as FAANG and attributed 70% of their returns since the IPOs to the growth of the Internet over that period of time.

“So in other words, it was a log function of the Internet growth, and that’s how cryptocurrencies are going to work. That’s just saying if you take it to a million users, you could get to $25,000.”

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