It's in the source material, but crudely it looks like tether issuances were used to prop up the market as it faltered, timed as they were. Either there was a remarkably, improbably prescient actor there, or it looks fishy as f*ck.
Probably not. Nobody knows the full story, but given that the pattern is one of responding to market movements rather than looking like money flowing in to a market from investors, it seems unlikely.
Further, given their outright lies about auditing and the recent admission that only 75% of tether is backed by cash or cash-like instruments, it looks a lot like a huge fraud to me.
Make your own mind up I guess, but if you're going to tell me "See, nobody actually knows!", then that's true. But we can analyse what looks likely, and what looks likely is that it's been issued out of thin air to prop up the market price of BTC and fleece market participants for the benefit of owners of the Tether corp and Bitfinex.
I guess we'll see more as the various lawsuits shake themselves out.
People do "technical analysis" on a daily basis, only to be wrong 50% of times.
The paper is quite filled with terms unclear to a non-finance 3rd party, but here is what I gathered from reading it diagonally and your explanation:
Their only argument about Tether in question not being cash backed is that it is infused exactly at the moments when Bitcoin goes down, and that is "not consistent" with what investors generally do.
Well, duh. Maybe it is not consistent with investing in, for example, falling Microsoft stock after some scandal reveals malpractice. But in case of cryptocurrencies, which historically have been very volatile, it makes quite a bit of sense to buy on a downward turn.
I don't see any reasoning in the paper, assigning probabilities to their expectations for investor behavior versus the reality of Tether trading conditioned on both hypothesis. And that assumption is the cornerstone of the claim. 80% of the paper for whatever reason is spent proving an obvious fact, that large Tether infusions are causing the rise of cryptocurrency prices.
> People do "technical analysis" on a daily basis, only to be wrong 50% of times.
That's because 'technical analysis' of an irrational market, for the purposes of projecting price movements, is worthless.
That's not the same as retrospectively examining things that have occurred in the past.
> in case of cryptocurrencies, which historically have been very volatile, it makes quite a bit of sense to buy on a downward turn.
But not in huge monolithic chunks.
Look, you live in denial if you want, but it's been pointed out so many times that tether is dodgy as all hell (and they've more or less admitted it themselves too). We'll find out sooner or later what's gone on.
Can't find how did they determine, that Tether was not bought with cash, so this statement is basically baseless.