Study Finds “No Evidence” of USDT Price Manipulation

A study examining the widely suspected correlation between Tether issuance and BTC price movement, undertaken by Wang Chun Wei and published by the University of Queensland, has found that USDT grants do not have a “statistically significant” effect on price fluctuations. Despite refuting the correlation between price fluctuations and Tether grants, the study notes a “positive relationship” between USDT issuance and “increased crypto-trading the following day.”

Study Finds No Statistical Correlation Between Tether Issuance and BTC Price Movements

Among the key assertions concluded by the study are that “It is unlikely that Tether manipulation caused the 2017 Bitcoin rally,” and that “Tether grants did not Granger-cause Bitcoin returns.”

The study employs an autoregressive distributed lag (ADL) model, testing “if Tether grants Granger-cause Bitcoin returns,” finding “no evidence suggesting Tether grants Granger cause Bitcoin returns.”

Strong Correlation Between USDT Grants and Increased Trading Activity Identified

Elsewhere in the report, Wang Chun Wei cites the work of Griffin and Shams (2018), stating that “After tracking transactions between individual wallets…using over 200 BG worth of blockchain data…[Griffin and Shams (2018) found] that purchases with Tether are timed following Bitcoin downturns, suggesting Tether was used to support and manipulate Bitcoin prices.”

Mr. Wei notes that his “findings show that Tether grants were potentially timed to follow Bitcoin downturns and subsequent Bitcoin/Tether trading volumes increased, confirming Griffin and Shams (2018) narrative,” however, seeks to refute Griffin and Shams’ assertions, concluding that “the impact of Tether grants on Bitcoin returns were not statistically significant, and therefore Tether issuances cannot be an effective tool for moving Bitcoin prices.”