In their paper “Is Bitcoin Really Un-Tethered?”, academics John Griffin and Amin Shams investigated whether tethers (USDT) are used to manipulate the prices of bitcoin. The paper concluded bitcoin purchases with USDT are often timed following market downturns, and that such patterns are most consistent with USDT used to manipulate prices.

However, observing bitcoin purchases with USDT following market downturns is not extraordinary and is no proof of market manipulation. Such purchases could be explained by demand from market participants, either for buying the dip or for arbitraging spreads across exchanges. Some of the paper’s claims seem unwarranted.


In their…

(This article is a subsection of “King Tether and the Stable Coin Wars”, presented here stand-alone to allow for more arbitrage examples, and to provide a resource for readers looking to understand how stable coins maintain their pegs to fiat currencies — article was written in Oct/2018, while the arbitrage process changed in Nov/2018, when USDT became redeemable at Tether directly, rather than at Bitfinex via fiat withdrawals).

Tether is a cryptocurrency issued on the bitcoin blockchain. It is a stable coin, where each tether in circulation is meant to be backed one-to-one by fiat currency held in deposit.


Tether (USDT) maintains its dollar peg due to the work of arbitrage traders. USDT could lose the peg in the event of an increase in perceived liquidity risk and/or credit risk. In September 2018, new stable coins entered the market. Soon after, rumors of Tether banking problems started to spread. USDT began to drop due to market participants getting out of USDT while arbitrage traders required higher returns due to higher perceived risks. Then, on October 14, large market participants triggered a 15% USDT flash crash. A large exodus from USDT has seen Tether redeem $680 million since then. Tether…

Summary of every occasion tethers (USDT) deviated considerably from the US dollar since 2017. Also valuable as a timeline of every major bitcoin market event.


USDT generally trades at a discount to USD when traders perceive Tether/Bitfinex are having issues potentially affecting their solvency and/or the USDT liquidity (i.e. banking issues, see here). During tether driven panics, bitcoin prices twice crashed, and twice spiked.

USDT generally trades at a premium to USD when bitcoin prices are crashing due to factors not related to tether (or during times of peak bitcoin euphoria, as shown by what transpired during December 2017).

Bitfinex is a fiat exchange. Given its position as tethers’ gateway, usually when USDT trades at a premium over USD, Bitfinex trades as a fiat-tether hybrid…

Cryptocurrencies have been massively rewarding for both early investors and savvy traders. Take bitcoin for example. All those who invested before 2017 have seen returns greater than 550%. Traders on the other hand greatly benefit from bitcoin’s significant volatility: one day of bitcoin volatility is nearly equivalent to volatility of an interval of roughly 23 trading days for the S&P 500. For traders, volatility brings opportunity.

In this article I will focus on the reasons behind a grim outlook for crypto investors, at least in the short-term.


  • Valuations
  • Usage
  • Demise of the ICO
  • Plunge Protection Team
  • Retail Demand
  • Institutional Demand

A bitcoin Exchange-Traded Fund (ETF) would be massively bullish for bitcoin’s price. It would further legitimize bitcoin and would allow several asset managers, currently precluded, to participate in the asset class.


The CBOE bitcoin ETF proposal is vastly superior to prior ETF proposals, and addresses most of the concerns the SEC has expressed when rejecting prior ETF applications. Yet the SEC’s key concerns remain: underlying bitcoin markets are not demonstrably resistant to manipulation, and are mostly unregulated. An ETF needs to require rules to prevent manipulative practices. …

Warren Buffett: “Never invest in a business you cannot understand”.

The Blockchain technology is revolutionary. Yet investors are throwing millions at cryptocurrencies offering terrible value propositions, and despite the recent market drop on the back of the China ban of cryptocurrency exchanges, cryptocurrencies are still in bubble mode.

Prices may have risen too far too fast: the aggregated cryptocurrency market capitalization has gone from USD 18 billion to USD 135 billion between the start of 2017 and now, a 650% increase. Many valuations are outrageous; cryptocurrencies with no intrinsic value are currently worth hundreds of millions. …

Alex Krüger

Economist. Trader. Columbia MBA. Not financial advice.

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