Tether Hampering Bitcoin, Cryptocurrency Decoupling?

Tether Hampering Bitcoin, Cryptocurrency Decoupling?

Critics have been calling out the US pegged stablecoin Tether as being a systematic risk to the cryptocurrency markets due to the company’s seemingly inability to release audited reports proving dollar for dollar reserves. Tether, which accounts for 1/4 of trade volume with Bitcoin alone, has been used by exchanges that haven’t been able to find banking. Diar data crunching shows cryptocurrencies are less likely to be affected by Bitcoin’s price fluctuations, should Tether be a small part of traded volume, along with fiat trading.An impressive 64 exchanges carry Dash. But the private coin’s price fluctuates with Bitcoin most closely (see chart). Data shows Dash is also most traded into Tether (USDT). And this isn’t because of lack of options, but apparently, traders choice, as Dash pairs up with 13 currencies – more than any other cryptocurrency bar the top 5 majors.
|| A STELLAR POINT? MAYBE…
From ZCash, Augur to the other end of the spectrum, Stellar and Ripple, correlation with Bitcoin price fluctuations begin to decrease. And this may be in part due to a decrease in the coins trades into Tether. Stellar, which is the least price sensitive to Bitcoin’s price fluctuations after Ripple, is also traded most into Bitcoin.
|| IS THE TAIL WAGGING THE DOG?
Trades into fiat also seem to be increasing, and clearly, in the case of Ripple who trades 49% of the time in Fiat, has the lowest sensitivity to Bitcoin’s price fluctuations. Nonetheless, correlation remains high.
Notably, privacy cryptos, are traded most into Tether, while settlement tokens are on the flip-side of the coin with the least price sensitivity.
|| EXCHANGES FINDING ALTERNATIVES
A shift in stopping support for Tether by exchanges has been gathering pace in recent weeks. Bittrex announced that it will begin supporting a different stablecoin, TrueUSD. If this will address reserve concerns, or bring up new ones is yet to be seen. Bit-Z, a top 10 exchange announced it will stop supporting USDT all together by months end. And in no small part, the largest exchange, Binance is on the offensive to secure banking in its new home base, Malta (see story below).

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