Artificially raise the rate of the cryptocurrency is not so easy, writes Bloomberg. Starting from the results of studies which address potential manipulation in the markets virtual currency, journalists, news agencies analyze the correlation between some of the virtual assets and Tether. Last time Bloomberg analytical article about fraud with tokens Tether, allegedly carried out by the exchange, Kraken, has caused heated debate in the community. Bloomberg new material — in an exclusive translation CoinMarket.News.
“Pump up” the course of cryptocurrencies in the background of the decrease of $209-billion cryptocurrency market is becoming more difficult. At least this is well illustrated by the Tether — asset characterized by one of the most significant volumes of trade, which, moreover, allegedly was used to manipulate the price of bitcoin.
Only in August the turnover was released Tether in excess of half a billion dollars. Before the issue of the token is often accompanied by a rally of bitcoin, but this time, the leading cryptocurrency, in contrast, has lost 15%.
The close relationship of these events to a greater extent evident last year, when bitcoin has reached a historic high, and the results of the work of researchers from the University of Texas, published in June of this year. According to their findings, “Tether, probably used both for stabilizing the prices of bitcoin and manipulate it”.
Questions about Tether and one of the world’s largest cryptocurrency exchanges Bitfinex, which, among other things, run virtually the same people that startup Tether, did not leave the members of the crypto community since last year, when Bitfinex has lost its connection with the banks, however, operation has not stopped. In December last year, the us Commission on commodity futures trading (CFTC) sent the companies ‘ agenda, hoping in the course of the audit is to find evidence that the Tether actually provided a reserve of us$, as claimed. And yet, companies under the jurisdiction of the British virgin Islands, has not yet been accused of wrongdoing.
According to Tether, at the moment the total amount of the issue of token — $2.8 billion Digital currency is trading at the rate of about $1, since each coin is assumed to be provided as one U.S. dollar lying in the Bank. Currency trades involving which began in 2015, become a sustainable alternative to bitcoin, with its high volatility and kind of a safe haven for cryptocurrency investors.
However, in a recent study, it was noticed Chainalysis part Tether in trying to influence the courses of the smaller coins to stimulate their growth. So, according to the report, last year, Tether has been associated with bitcoin, and Litecoin about 85% of the time period. When in the beginning of the year courses have fallen, this correlation decreased on average by 93%. However, from January to June, a high correlation was monitored between the Tether and the EOS, and Tether and NEO.
“While activity on blockchain transaction largest cryptocurrency was characterized by a downturn, traders continued to look for opportunities to profit using some of the newer cryptocurrencies with smaller trading volumes. […] High-volatility trading pairs with the participation of the Tether and [currency] with smaller volumes — a typical sign of activity of the pump-and-dump. […] A sudden increase in individual trading volume and the subsequent sharp decline is a characteristic of the manipulation of prices”, — the authors of the study.
Tether has issued $515 million tokens this month, according to the blockchain (approx. Omni uses statistics Explorer). The analysis demonstrates that all the new tokens were sent to the stock exchange Bitfinex. This is confirmed by the findings of the report Chainalysis.
“After the issue all tokens Tether passed through the trading platform Bitfinex, the only direct client Tether”, — the report says.
In turn, Bitfinex about 80% of the Tether was sent to six other exchanges: Bittrex, Poloniex, Huobi, OKEx, Binance and Kraken.
And yet, even more than half a billion new tokens Tether are unable to influence the course of EOS and NEO in August. From 30 July to 21 Aug EOS lost 37% of its value, while the NEO — 44%.
We will note, the representative Bitfinex and Tether Liam Murphy (Liam Murphy), supervising external contacts of companies, declined to comment to Bloomberg.