By On August 7, 2019, Coin Metrics, a crypto market research company based in Massachusetts, revealed that just 318 unique identifiers, which are similarly referred to as addresses, hold $1 million of the controversial token – Tether.
The controversial token, introduced in 2005, has been creating controversies such as the nagging concerns of its illegality. This has posed a challenge in securing banking services. The companies behind Tether were accused, back in April, of concealing the losses and co-mingling client and corporate funds. The New York attorney general raised these claims. Social media has termed some of the Tether founders and exchanges as Tether Mafia.
The world of cryptocurrency is more stuffed than observers can realize. Even so, it seems Fintech Whales own almost a fifth of the largest cryptocurrencies and are the largest holders of Bitcoin, Coin Metrics say that Tether addresses show that 300 users control around 80% of the token.
John Griffin, a finance professor at the University of Texas in Austin, said that the control of Tether is in the hands of a few key players, due to its concentration. The professor believes that the central players have vested their interests in waving Bitcoin prices. He also mentioned that many of the exchange platers are interested in keeping the game moving. He also linked the stablecoin to market manipulation and dramatic fluctuation in Bitcoin price back in 2017 – when the price of bitcoin was up to the $20,000 mark.
BitInfoCharts revealed that more than 20,000 Bitcoin addresses have balances of at least $1 million. When compared to Tether, bitcoin is widely held. Tether’s ownership concentration is raising the levels of risk in the volatile $300 billion cryptocurrency market.
Coin Metrics Findings
In Binance and Huoboi, the two global leading crypto exchanges, Tether was used in 40% and 80% of all the transactions according to Coin Metrics. One of the co-founders of Coin Metrics, Nic Carter, revealed that the findings also denoted a market capitalization of $4 billion.
Tether Whales are projected to have user accounts in most of the world’s biggest exchanges, including Malta-based Binance and Hong Kong-based Bitfinex. Nic mentioned that also some of the big holders of Tether are brokers that cater to Chinese investors who like to exchange with the yuan and in high-frequency trades.
Final Thoughts
The ownership of the Tether can be more concentrated since one person can own more than one address. The addresses that Coin Metrics looked at had at least $1 million Tethers on the OMNI and Ethereum blockchains. Other smaller digital ledgers use Tether.
Sid Shekhar, a co-founder of market tracker TokenAnalyst, said that the extreme volatility which occurs when large swatches of Tether are distributed in the market is brought about by the extremely centralized holdings.
Comments