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Tether Influx Is Not Driving Bitcoin Price: Kraken CEO

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kraken ceo
kraken ceo

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From inception, there have been numerous allegations against USD-backed stablecoin Tether, and many crypto critics claim that the cryptocurrency is used to boost Bitcoin prices. However, CEO of crypto asset exchange Kraken, Jesse Powell has shed some expert light on the matter and stated that the surge in Bitcoin prices has nothing to do with Tether manipulation.

Speaking to finance news channel TD Ameritrade Network on July 1, Powell stated that BTC trade volumes are, in fact, driven by real demand and contrary to critics’ claims, Tether volumes are the best way to know.

Tether’s overall supply has more than doubled in 2019, and Decrypt data reported that almost $1 billion of new Tether (USDT), entered the cryptocurrency market.

Tether is a Pointer To Fiat Influx Into Crypto Exchanges

Answering directly to whether the Tether supply increase is responsible for the uptick in BTC price, Powell affirmed that growth in Tether supply usually coincides with a growth in US Dollars flowing into cryptocurrency exchanges, therefore the BTC growth is fueled by the influx of new retail investors into cryptocurrency exchanges. 

“…historically, when you’ve seen growth in the supply of Tether, we’ve seen growth in the supply of U.S. dollars coming onto Kraken. And other exchanges would report the same”, said Powell. 

Powell went on to say that Tether is just a transparent version of the traffic loop that exchanges experience during times when the market value of BTC is increasing, the said price increase is getting heavy reportage from the media, and FOMO is driving retail investors to buy cryptocurrency and use cryptocurrency exchanges. 

“There are days when you see the price going up to ten percent a day. You can bet all the exchanges are onboarding fifty to a hundred thousand new users a day [when that happens]. That is what is driving up the price. It’s huge retail demand and all the media attention on it. It’s not Tether,” Powell explained

With the recent price rally of BTC, and the market value breaking 13-month highs in June, Powell’s theory is that FOMO and increasing adoption of cryptocurrency are the real drivers of BTC price, and Tether supply is just a secondary factor. 

However, Powell’s claims contradict recent Google Trends data, which revealed that interest in bitcoin surged only a little between April and June 2019, compared to interest in the cryptocurrency during the 2017 bull run.

If Not Tether, Then What? 

Analysts have had field days trying to come up with factors that affect the price of Bitcoin. Apart from watching market patterns, however, not much has been forthcoming as to what drives the growth of the popular crypto asset. 

The Tether supply theory is only one of many, and alternative theories circle Facebook’s Libra as a possible driving force for the upward surge of BTC in the past month. At last week’s Bitcoin 2019 conference in San Francisco, Blockchain Capital’s Spencer Bogart shared his theories regarding bitcoin’s recent wild price swings with Bloomberg Technology.

According to Bogart, Libra has been BTC’s biggest driver in the few weeks since its announcement. Bogart’s comment was in reference to the reach and awareness that news of Facebook’s coin had lent to cryptocurrency and especially Bitcoin. 

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