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Kraken CEO: Bitcoin price driven by actual demand, not Tether manipulation

2019/7/6

The CEO of Kraken, a cryptocurrency exchange based in San Francisco, Jesse Powell, was interviewed and asked about his views on market manipulation by Tether, to which he expressed opposition.

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Due to the strong performance of cryptocurrencies this year, some Bitcoin skeptics claim that the market manipulation is caused by Tether, rather than any actual demand for Bitcoin.

Throughout Tether's history, it has faced numerous accusations, including price manipulation of Bitcoin and previous credit crises. Nevertheless, Tether's current trading price is $0.9978, indicating market acceptance.

During an interview on July 1st, Kraken CEO Jesse Powell was asked about the correlation between the recent surge in Tether supply and the rise in Bitcoin prices over the past few months. He immediately pointed out that this situation is similar to every exchange that accepts fiat bank deposits.

I have no idea what's going on with Tether, but I can tell you that historically, when you see the Tether supply increase, we also see an increase in USD deposits at Kraken, and other exchanges are likely seeing the same thing.

Powell further explained:

When Bitcoin prices rise, there is media frenzy, and retail investors flock to exchanges, Tether merely reflects what is happening at all exchanges: an "increase in supply." Unlike fiat, USD deposited via bank accounts into exchanges does not show up on the blockchain.

Powell also mentioned that Kraken has seen a significant inflow of fiat currency recently and believes this is a common reason for the increase in Tether supply.

Regarding Tether's USDT stablecoin, data analytics platform LongHash compared the current mainstream stablecoins in the crypto market. USDT is undoubtedly classified as centralized, with over half of its trading volume coming from Binance. However, upon closer inspection, "all stablecoins are much more centralized than USDT."

Source: LongHash

There are various reasons speculated for the rise in Bitcoin this year. Billionaire Michael Novogratz believes it is driven by Facebook's Libra project entering the cryptocurrency space. Powell, on the other hand, refutes the notion of Tether manipulating the market. In his view, Tether is just a way for "new money" to enter exchanges.

Powell concluded:

When you see prices going up 10% every day for a few days, that's certainly thousands of new users coming into exchanges every day, which is what's driving the price up. It's a result of massive retail demand and all the media attention, not Tether.

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