As the month dawned, the world’s largest cryptocurrency in terms of market cap, Bitcoin, exhibited massive waves of pullback. Following the same, the community saw a large volume of Tether being released by the Tether Treasury. Soon after the news broke out, Bitcoin prices started to gain pace. The digital-asset was still in recovery mode and at press time, had amassed double-digit gains over the past 24 hours.
A significant increase in the supply of Tether has been noted over the past few months. However, what’s striking is the fact that these increases in supply have coincided with the monumental rise in the Bitcoin’s price, evoking several questions.
Allegations against Tether continued to pour in after several skeptics sided with the narrative that Bitcoin’s rally was primarily due to the freshly-minted stablecoin. However, Kraken CEO Jesse Powell, refused to join the gang and refuted allegations of potential market manipulation. He is not alone, however. The latest figure in the cryptospace to join the bandwagon was Dovey Wan. Founding Partner at Primitive Ventures, Wan repudiated the controversy, terming it as “low IQ claims.”
In a series of two tweets, Wan explained that these claims were “over-complicating” the simple things and that there is no such thing as “Tether artificially inflated price.”
Contrary to recent claims, Tether’s growth in supply is a lagging indicator. This means that the stablecoin’s circulation increased after Bitcoin’s price pump, and not the other way around, the Founding Partner said. Her tweet read,
“Tether supply growth is an lagging indicator of $BTC price not an leasing indicator. It’s primarily due to demand of fiat on-ramp and increase of trading activities”
The venture capitalist went on to say that Bitcoin’s valuation needs to break a few “major levels,” in order to attract volumes and trading activities, essentially driving up demand for the asset, which in turn would invoke supply as opposed to the ongoing narrative.