The Intraday Bitcoin Response to Tether Minting and Burning Events: Asymmetry, Investor Sentiment, and “Whale Alerts” on Twitter
Tether Limited has the sole authority to create (mint) and destroy (burn) Tether stablecoins (USD₮). This paper investigates Bitcoin's response to USD₮ supply change events between 2014 and 2021 and identifies an interesting asymmetry between Bitcoin's responses to USD₮ minting and burning...
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| Format: | Article |
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2023
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| Online Access: | https://repository.li.mahidol.ac.th/handle/123456789/87527 |
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| Institution: | Mahidol University |
| Summary: | Tether Limited has the sole authority to create (mint) and destroy (burn) Tether stablecoins (USD₮). This paper investigates Bitcoin's response to USD₮ supply change events between 2014 and 2021 and identifies an interesting asymmetry between Bitcoin's responses to USD₮ minting and burning events. Bitcoin responds positively to USD₮ minting events over 5- to 30-minute event windows, but this response begins declining after 60 minutes. State-dependence is also demonstrated, with Bitcoin prices exhibiting a greater increase when the corresponding USD₮ minting event coincides with positive investor sentiment and is announced to the public by data service provider, Whale Alert, on Twitter. |
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