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WSJ article on Bitcoin sparks backlash from Coin Metrics

Nick Carter, co-founder of Coin Metrics and Castle Island Ventures, reacted to a recent article by The Wall Street Journal (WSJ) that talked about “the Bitcoin bubble stemming from the release of the stablecoin Tether (USDT).”

According to Carter, Andy Kessler’s article “Behind the Bitcoin Bubble” borders on “journalistic negligence.”

“If you are writing for one of the most respected financial publications, then you can at least try to evaluate the data underlying your statements, and not just accept them uncritically. But Mr. Kessler didn’t. He just blindly repeated the fictional claim of an anonymous blogger that bitcoin is somehow dependent on Tether, “Carter writes.

The WSJ journalist wrote part of his article based on a viral post by blogger Crypto Anonymous titled “The Big Crypto Bottom Game. Financial Catastrophe Mechanism ”(translation). According to Kessler, the blogger “found that every day about two-thirds of bitcoin is purchased with USDT.” This statement is based on data from the analytical service CoinLib.

“Usually I don’t care. Bitcoin is nothing, concept of an idea. People make few bitcoin transactions. It is not a store of value – anything that falls 30% in a week does not fulfill this role. But we hear stories from Bloomberg about what inspired “newbies to bitcoin to buy at record high prices.” People can be seriously hurt, ”added Kessler.

Kessler also noted that “Coinbase, the largest Bitcoin holder, does not support USDT. Do they know something? ” (Coinbase maintains its own USDC stablecoin in partnership with Circle.)

Carter wrote that evaluating BTC / USDT trades using CoinLib data was “unjustified” as it included dozens of exchanges with fake trading volumes that were ignored by reputable analytics services.

He said that any serious trader knows that “many of the exchanges that CoinLib monitors cannot be trusted, so the data obtained is completely unreliable.”

“This data is not enough to confirm the words that bitcoin is at the mercy of Tether. Relying on them can mislead people. Unfortunately, the major financial media now only support these erroneous statements, ”he said.

Carter concluded that CoinLib accepts data from exchanges without checking its validity, and “naive analysts like Crypto Anonymous” use it to spread FUD about bitcoin.

Many highly regulated exchanges and institutional funds don’t use Tether at all, Carter said, but they all have a significant impact on its price:

“Cash App, Paxos, Paypal, BlockFi, Robinhood, Bitwise and Grayscale affect bitcoin in various forms and are linked to the commercial banking system, and in some cases to public companies. Tether is not here. ”

“Crazy data-driven theories that everyone in the crypto industry knows to be wrong doesn’t benefit anyone,” added Carter.

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