The people behind cryptocurrency Tether deny investors are moving out of the coin to buy Bitcoin.
In the past seven days, while Bitcoin surged from $6,209 to $7,044 and then slipped back to $6,526, Tether also traded between the top and bottom end of the $0.96 to $0.95 range.
Although Tether denies buying Bitcoin low to push the price up, the experts cautions investors appear to be selling out of Tether in favour of Bitcoin.
Tether is pegged to the dollar and the price should always be $1, although this does not always happen in practise.
The price is designed to keep stable, unlike the volatile Bitcoin.
This can mean any opportunity is scant to make trading profits in the same way as with Bitcoin investments.
“Despite speculation, we have consistently stated that tether is backed by USD reserves at or exceeding the tethers in circulation at a given moment, and we’re glad to have independent verification of this so answer some of the questions posed by the public,” said Tether CEO Ludovicus van der Velde, who also acts as CEO of exchange Bitfinex.
“Bitfinex nor Tether is, or has ever, engaged in any sort of market price manipulation.”
Research by University of Texas academics claims Bitfinex used Tether to buy Bitcoin at times of low demand and hike up the price.
The paper argues Tether’s price patterns are “most consistent with the supply-based hypothesis where Tether is used to provide support and manipulate cryptocurrency prices.”
ATM sets out to beat Indian crypto ban
Digital cryptocurrency exchange Unocoin has launched an ATM network in India to bypass a central bank ruling banning banks from holding accounts for inline trading platforms.
The move was seen as a government crackdown on investors pouring money into digital currencies.
Unocoin has skipped around the problem by allowing investors to run their online wallets from ATMs linked to accounts outside India.
“In the first phase we plan to deploy 30 machines. The first is in Bangalore followed by Mumbai and New Delhi,” said Unocoin CEO Sathvik Vishwanath.
The ATMs allow investors with Unocoin wallets to buy, sell and hold up to 30 cryptocurrencies.
The drawback is an investor must go to an ATM to trade digital currencies.