A new report by crypto data analytics firm LongHash refutes the idea that Tether manipulated the market to create bitcoin’s 2017 bull run. 

LongHash’s report disputes the previously published controversial academic paper “Is Bitcoin Really Un-Tethered?,” which argues that stablecoin manufacturer Tether played a role in manipulating the market for bitcoin’s massive bull run at the end of 2017.

The academic paper, authored by the University of Texas professor John Griffin and Ohio State University Assistant Professor Amin Shams, also claimed that a single whale investor was responsible for kick-starting the BTC price bubble. 

According to the report, LongHash analyzed a metric called “Tether Purchasing Power” to determine its influence on bitcoin’s price, 

To measure the impact of Tether on the Bitcoin market, we calculated a metric called Tether Purchasing Power, which is defined as the market cap of Tether divided by the market cap of Bitcoin. It measures how many Bitcoins can be purchased with all the Tether supply in the market at its current spot price. The higher the ratio, the more potential manipulation could have been perpetrated with Tether.

LongHash determined that Tether’s impact on the market is strongest when the price of bitcoin falls rather than increases. Per LongHash, the data suggests that if Tether was using the USDt stablecoin to manipulate the market, it would be at its strongest when BTC’s price falls. PEr its report, “Tether’s potential influence on Bitcoin prices” would be “maximal during bear, not bull, markets.”

The report concludes current evidence “to be lacking” in supporting Tether’s manipulation of the price of bitcoin.

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