Three-quarters of all tether tokens have only 318 addresses
The distribution of tether ownership is worryingly concentrated: data from Coin Metrics shows that only 318 addresses have 80 percent of all tethers in circulation.
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Coin metrics data show: Tether ownership is highly concentrated
Tether, a stablecoin created to provide liquidity to crypto-currency exchanges, is no stranger to controversy. Since its launch in 2015, the company has been at the center of several media scandals, most of which have focused on its inability to secure its coins in Fiat currency. Most recently, Tether's parent company (iFinex) was accused by the New York Justice Minister of hiding its losses and mixing client and corporate funds.
And now, recent Coin Metrics research found that the cryptocurrency is much more concentrated than previously thought - data show that only about 300 units control about 80 percent of all currently circulating tethers. Only 318 addresses contain $ 1 million or more USDT, reports Coin Metrics.
John Griffin, a finance professor at the University of Texas at Austin, told Bloomberg: "This concentration of tether indicates that control is in the hands of a few key players. According to the finance professor, all of them have the unique ability to fluctuate Bitcoin prices - and a personal interest in doing so.
IT ALSO STATES THAT MANY EXCHANGE PLAYERS HAVE A PERSONAL INTEREST IN WORKING TO KEEP THE TETHER GAME RUNNING, HE ERAGED.
Most tether is held by exchanges, not by whales
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Tether's high concentration of ownership increases the risk in the crypto market, writes Bloomberg, citing Sid Shekhar, co-founder of Market Tracker Token Analyst. Shekhar says: The extremely centralized stocks lead to extreme volatility when large parts of tether are offered on the market. Griffin agrees, saying that the dramatic increase in the bitcoin price in 2017 was a direct result of tether market manipulation.
But Bloomberg's contribution does not manage to raise the alarm. Dozens of Twitter users comment on the article, saying that some kind of concentration of tether is expected. Adam Back, CEO of Blockstream, says that Tether's primary use case is stock market trading and that stocks of large volumes of USDT also have millions of active users.
Many other users have joined the discussion in the meantime and say that these funds are actually from the customer balances of these exchanges and do not belong to the stock exchanges themselves.
Coin Metrics found that Tether was used in 40% and 80% of all transactions on Binance and Huobi. Since these two are one of the largest crypto exchanges in the world, it is no wonder that USDT ownership appears focused. And while there are many reasons to distrust tethers, data on USDT concentration speaks a different language.