Bitcoin (BTC) has been increasingly accepted since the past 10 years. In recent years, easy access to Bitcoin through stabilcoins such as Tether has been sparking every day whether there is a relationship between Tether issuance and BTC price action.
Waresh Business School Finance Professor Ganesh Viswanath-Natraj discussed the prevailing view in the market that there might be a common link between Tether issuance and Bitcoin price, and between the printing of stable cryptocurrencies like Tether and the Bitcoin price in the crypto market. He stated that there is no statistically significant relationship.
“There is no relationship between Tether issuance and Bitcoin prices. So there is no statistically significant relationship. All of our evidence here confirms our opinion. ”
Stressing on the research article titled “Stable money does not inflate the crypto markets”, Natraj stated that the issuance behavior can only be explained by maintaining a decentralized exchange rate system and being seen as a safe haven in the digital asset economy.
In the recent past, Tether’s exports continued to increase, but there were cases when the Bitcoin price mostly moved sideways. However, considering the last few months, the market data from the curve clearly shows how the increase in Tether’s market value is in sync with rising Bitcoin prices, and Tether’s car currency function can easily be displayed here.
In times of risk, some investors choose to switch to a better value store. The current interest in Tether and other stable coins stems from their ability to perform this function with minimal intermediary costs.