Tether is a cryptocurrency startup that has been courting controversy since the time it was launched. Currently, data from Omni Explorer indicates that Tether has just released 250 million more tokens on top of the 300 million USDT tokens released March this year.
Allegedly, Tether is backed by US dollar at a ration of 1:1. The company has, however, received a lot of criticism from onlookers about this fact with most questioning the company’s integrity, while calling for an audit on the entity.
More Tokens Incoming
With the news about Tether adding more tokens, the cryptocurrency community took to Twitter to share their opinion. Holders of the stable coin (USDT) will be looking to see a recovery in Bitcoin’s price considering that Bitcoin appreciated from $8,100 on May 18th to $8,500 on the 21st of the same month this year during another release of $250 million’s worth of tokens.
In a move to respond to the allegations about its coin being backed by actual dollars, Tether has moved to release documents from its auditors last week. The firm is called Firm Freeh Sporkin and Sullivan LLP. According to the Audit firm, USDT is 100 percent backed by physically stored dollars as of June 1st.
Does Tether Manipulate BTC During Volatile Markets?
However, even though the report from the FSS was not a full report, it highlighted an important aspect of USDT; whereby it can easily be used to manipulate market prices. Most critics have previously blamed the startup for destabilizing Bitcoin’s price during volatile markets.
In fact, a study conducted by the University of Texas has revealed that Tether has been behind Bitcoin’s price manipulation since 2017. Although Tether’s CEO has denied these claims, the study showed that USDT has previously been used to “provide price support and manipulate cryptocurrency prices”.
Furthermore, the study reveals that over half of Bitcoin’s December 2017 prices were explicitly due to Tether’s interference in market movements. The research further claims that “Using algorithms to analyze the Blockchain data, “ they were able to “ find that purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices,”
Previous Tether’s token releases have been met with a lot of scepticism over the company’s ulterior motives. However, with regards to the recent token release, Litecoin’s founder Charlie Lee mentioned that more money will be pumped into the market – and that this might result in a price recovery. He said,
Generally, this has been a precursor of price going up. Tether gets printed when people deposit USD and get USDT back. This USDT will then be used to buy crypto. This is similar to someone depositing $250MM to exchanges. Of course, that doesn’t mean they will buy right away. DYOR
What do you think about the move by Tether to launch 250 million tokens? Share your thoughts and opinions in the comments section.