Centralization is a well-known problem of crypto markets. People often referred to as whales control a fifth of some markets and have the strength to promote manipulation whenever they want to.
Tether, however, seems to be facing an even worse situation: only 318 crypto addresses actually control 80% of the circulating supply of Tether (USDT). The discovery was made by Coin Metrics.
According to John Griffin, a University of Texas professor who was interviewed by Bloomberg, these players are actually Bitcoin manipulators. According to him, they own a huge amount of Tether in order to swing the prices the way they want to, using it to buy Bitcoin whenever they want to spike prices. They could also obviously manipulate Tether’s markets easily.
Studies reveal that 40 to 80% of all the transactions that were made on Binance and Huobi recently were made with Tether. The token is also often used in several smaller exchanges as well. This shows just how influential these few whales are. They may actually be some of the most important traders in the crypto market, hidden in plain sight behind their wallets.
The founder of Coin Metric, Nic Carter, confirmed that several of these large Tether holders cater to the Chinese market and to high-frequency traders, too
When we consider that a person can have more than one wallet, the market looks even more concentrated than before. Instead of having 300 whales, there are probably less than half of that, maybe even less than a hundred.
What does this mean for the crypto market? It means that manipulation may be even more prominent than many small-time investors believed, which is not very good news.
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