Bitcoin Researchers disagree with single whale theory

Longhash, a crypto analytics firm, has announced that their researchers have calculated a metric called "Tether Purchasing Power." The metric provides details on the question of whether Tether (USDT) was used to manipulate the cryptocurrency markets. It helps in measuring the amount of BTC that could be bought with the entire Tether supply at any given time. The higher the ratio, the more likely it is for Tether to manipulate the crypto markets.

According to Longhash's data, Tether's purchasing power was the highest in the summer of 2017. It gradually declined towards the year-end. During the bear market in 2018, its purchasing power shot up in a significant manner. Longhash finds evidence to prove that Tether is manipulating Bitcoin to be lacking.

The researchers said:

This suggests that even if Tether were indeed manipulating the market, its ability to do so actually is strongest when the Bitcoin price falls. This contradicts the claim that Tether issuance drove the 2017 bull market. The supply of Tether actually failed to keep up during the height of the bull market.

Earlier, an academic paper named "Is Bitcoin Really Un-Tethered?" suggested that one single person or entity was allegedly the cause of Bitcoin's historic price surge in 2017. As per the paper, the Tether stablecoin and its issuer Bitfinex played an essential role in the alleged hoax. Having denied the allegations, Bitfinex called the publication a transparent attempt to use the semblance of academia for a mercenary money grab.” Several industry experts dismiss the single whale theory. 

Juan Villaverde and Martin Weiss of Weiss Ratings agency told Cointelegraph in an interview:

There is abundant anecdotal evidence that throws great doubt on the one-large-player theory. For example, exchanges were swamped and not able to onboard new customers. Google searches for “Bitcoin” and “cryptocurrency” were off the charts. New crypto businesses and ICOs were popping up every day. All of this — and more — suggests that the crypto surge of 2017 was very much a mass phenomenon, with heavy public participation.