Only 318 addresses control 80% of Tether (USDT)!
Only 318 addresses control 80% of Tether (USDT)
In a report released Aug. 7, 2019 by Bloomberg, the newspaper reports on the company’s findings regarding this centralization of the capitalization of the famous stablecoin, the Tether (USDT).
Coin Metrics co-founder Nic Carter also mentioned that some of the USDT whales included major cryptocurrency trading platforms, such as Binance and Bitfinex.
A centralization that opens the way to manipulation…
Studies show that 40 to 80% of all transactions that have been made on Binance and Huobi recently have been with Tether.
This shows how these few whales can have influence in the markets.
It may be that it is in fact some of the most important platforms of the cryptocurrency industry and not isolated individuals, hiding their identity behind their wallets.
Nic Carter added:
“The concentration of Tether suggests that the control of Tether is in the hands of a few central players who can cause Bitcoin prices to fluctuate, and which have a direct interest in doing so […]
This also suggests that many market players have a direct interest in keeping the Tether’s movements active.”
In addition, Griffin reportedly tied the USDT to the manipulation of the market and its runaway to a record high at the end of 2017, which is also likely to be the case for the current rise of Bitcoin (BTC) and the fall of most other cryptocurrencies .
According to Sid Shekhar, co-founder of TokenAnalyst, there are also market volatility concerns that come into play when a significant amount of USDT is injected into the market.
Coin Metrics has reviewed addresses with at least $1 million in Tether.
Only one person or entity can have multiple addresses, so centralizing Tether can be even more important than imagined.
Nic Carter confirmed that many of these large Tether holders largely correspond to the Chinese market as well as to high frequency traders, who can work directly for the exchanges.
With a capitalization of nearly $4 billion, the high concentration of Tether ownership greatly increases the level of manipulation risk on the market.
With global capitalization of nearly $310 billion when writing these lines, a quick move of a few billion dollars can clearly create a new general trend for the Bitcoin price or any other cryptocurrency.
How to interpret it for the global market?
It is certain that Tether is not the only crypto-active that must be handled in this way.
Other cryptocurrencies may also be affected by this excessive centralization, which unfortunately does not correspond with the original vision of Satoshi Nakamoto, the creator of Bitcoin.
This can therefore easily lead to market manipulation by the most important holders of a cryptocurrency as important as Tether.