Pundit Analyzes How Largest Stablecoin Issuer Tether Influences Bitcoin Price
A recent analysis has raised a critical question about how Tether, the largest stablecoin issuer, quietly influences Bitcoin’s price. With over $140 billion in circulation, Tether comes under scrutiny for its potential role in Bitcoin price fluctuations. Tether claims to be 1:1 backed by USD reserves but has never undergone a full audit, relying instead on periodic attestations. This has continued to trigger concerns among industry observers.
Correlation Between Tether’s Issuance and Bitcoin Price
Crypto community commentator “All Things XRP” recently pointed out a striking pattern between Tether’s supply and Bitcoin’s price movements. Tether’s issuance often precedes significant Bitcoin price increases. For example, the commentator claimed that when Tether’s supply grew from $66 billion to $91 billion, Bitcoin’s price surged by 61%. This correlation, observed over several years, raises the question: Is Bitcoin’s price influenced by Tether’s increasing supply?
Furthermore, the commentator cited a 2019 study by Griffin & Shams that examined blockchain data and concluded that Tether issuance directly correlated with Bitcoin’s recovery following price dips. The study also noted that this issuance was linked to just one entity and that Tether’s reserves were missing at the time. Meanwhile, Tether dismissed the study as unfounded, calling it a “house of cards.” Despite this, All Things XRP believes it could indicate price manipulation rather than natural market behavior.
Tether’s Alleged Lack of Transparency
While Tether remains a cornerstone of crypto liquidity, critics argue that the stablecoin’s lack of full transparency creates significant risks for the broader crypto market. Notably, in 2023, a class action lawsuit accusing Tether of manipulation was dismissed due to insufficient evidence. However, the company has allegedly paid over $60 million in fines for misleading claims about its reserves. Meanwhile, the growth of Tether’s supply continues, adding fuel to the ongoing debate. All Things XRP highlighted that Tether’s influence over crypto liquidity remains undeniable despite the lack of a full audit. The pundit claimed that if regulators were to pull the plug on Tether or question its reserves, the liquidity and price of Bitcoin could face severe consequences.
Tether Under Continued Scrutiny
Tether’s operations remain under constant scrutiny, especially as its market cap expands. In addition to concerns raised by All Things XRP, recent reports have surfaced suggesting that the U.S. Department of Justice may investigate Tether for potential involvement in money laundering and fraudulent activities. Meanwhile, Tether CEO Paolo Ardoino dismissed these reports as outdated and unfounded. Yet, the allegations have added to the mounting pressure on the stablecoin issuer.
1/ Tether is the biggest player in crypto that nobody wants to audit.
$120B+ in circulation
Claims to be 1:1 backed by USD reserves
But… no full audit, ever.
Just attestations — which aren’t audits.
Sounds fine, right?
Well… buckle up.
— All Things XRP (@XRP_investing) April 9, 2025
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