All News Alt Coins Bitcoin

Mysterious Report Says Bitcoin Could be Really Worth 4,500 Dollars

Some people think the spectacular rise of the price of bitcoin at the end of last year was manipulated by Tether, a cryptocurrency that is supposed to be backed up by the US dollar. An anonymous report appeared recently with the question how much would bitcoin be worth without Tether? The answer is – around 4,500 dollars, with the price of bitcoin of 7,600 dollars per coin.

Tether is a cryptocurrency that is supposedly backed up by the American dollar and real dollar reserves deposited on some bank account somewhere. Tether coins are often used as a replacement for the dollar on the cryptocurrency exchanges. Traders use Tether coins to quickly buy and sell bitcoins, avoiding the long process of converting to and from traditional fiat currencies. However, Tether has not performed an audit to prove the existence of its reserves.

The uncertainty related to Tether upset the crypto investors and when Tether was subpoenaed by the US commodities trading regulator in December, it raised an alarm in the crypto community. At the same time, the price of bitcoin fell by 25%.

1000X is a group of investors that recently ordered a report in order to establish the influence of Tether on the price of bitcoin. Based on the publicly available information, the report established that the price of bitcoin went up by 40% in the two-hour windows after each newly emitted batch of Tether coins settled in the Bitfinex wallet. This took place in the period from last April till January this year. The crypto investors believe the analysis presented in the report is trustworthy.

The price of bitcoin was 15,000 dollars on January 4th, 2018, at the end of the period covered by the report. If the emission of Tether coins influenced the price of bitcoin and brought it up by 40%, then the price of the world’s most popular cryptocurrency would be around 9,000 dollars without Tether. However, some analysts warn that some news about Tether already influenced negatively on the price of bitcoin and that the difference should not be so big. The author of the report presented an even more negative expectations in some other scenarios. The author thinks the price of bitcoin could be only 30% of the price seen on the cryptocurrency exchanges in the analysed period. That means the price of bitcoin would not be 15,000 at the beginning of January, but only 4,500 dollars per coin.

There is another analysis suggesting an even lower price of bitcoin. The author pointed out a linear trend-line for the price of bitcoin since last April, when Tether began emitting large batches of coins. That trend-line determines the price of bitcoin at 2,000 dollars, instead at 15,000 dollars. In the conclusion, the author say: “It is highly unlikely that Tether is growing through any organic business process, rather that they are printing in response to market conditions.”

The author of the report recommends a audit of the Tether coins in order to prove that every coin is backed up by the US dollar. Tether hired an audit company from New Jersey, Friedman LLP, to perform this audit, but the company is no longer cooperating with Tether and is not willing to give any statements to the media. Tether issued a statement recently confirming it was not cooperating with the auditor any more.

Leave a Reply

Your email address will not be published. Required fields are marked *