Was Tether USD the Cause of the 2017 Bitcoin Bubble?

The Merits of Cluster Analysis

In general, I consider it a mistake to draw conclusions based solely on correlations — obtained through cluster analysis or any other means — whether it be related to Bitcoin, Medicine or any other field of scientific inquiry. Finding a correlation does not tell you which way causality runs — or whether or not a causal relationship even exists at all. At best, correlations are useful for generating research ideas. Alas, they are often used, instead, to cause confusion in click-bait news articles under headlines such as “Researchers Find Link Between Strawberries and Cancer”.

Explaining the Correlation in Context

Similarly, this analysis has observed large flows of Tether USD between small groups of addresses coinciding with large price spikes — notably, the 2017 spike. In a vacuum, without any context, one might hypothesize that the USDT caused the spike. However, those of us involved in the Bitcoin market know very well that:

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B.J. Dweck

B.J. Dweck

Bitcoin Coding, Custody Solutions & Seminars | Austrian Econ | Voluntarism | Authentic Parenting | NVC | PET | Project-Based Learning | Recovering Carb Addict