The Intraday Bitcoin Response to Tether Minting and Burning Events: Asymmetry, Investor Sentiment, and “Whale Alerts” on Twitter

Aman Saggu

doi:10.1016/j.frl.2022.103096

The Intraday Bitcoin Response to Tether Minting and Burning Events: Asymmetry, Investor Sentiment, and “Whale Alerts” on Twitter

Aman Saggu

Business Administration Division

Research output: Contribution to journal › Article › peer-review

20 Citations (Scopus)

Abstract

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.

Original language	English
Article number	103096
Number of pages	8
Journal	Finance Research Letters
Volume	49
DOIs	https://doi.org/10.1016/j.frl.2022.103096
Publication status	Published - Oct 2022

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 1 No Poverty
SDG 8 Decent Work and Economic Growth
SDG 9 Industry, Innovation, and Infrastructure
SDG 10 Reduced Inequalities
SDG 16 Peace, Justice and Strong Institutions

Keywords

Bitcoin
Tether
Asset Pricing
Market Efficiency
Stablecoins
Event Study

Access to Document

10.1016/j.frl.2022.103096

Cite this

@article{1f019935bfec499590f6e18e2f3f6658,

title = "The Intraday Bitcoin Response to Tether Minting and Burning Events: Asymmetry, Investor Sentiment, and “Whale Alerts” on Twitter",

abstract = "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.",

keywords = "Bitcoin, Tether, Asset Pricing, Market Efficiency, Stablecoins, Event Study",

author = "Aman Saggu",

note = "Publisher Copyright: {\textcopyright} 2022 Elsevier Inc.",

year = "2022",

month = oct,

doi = "10.1016/j.frl.2022.103096",

language = "English",

volume = "49",

journal = "Finance Research Letters",

issn = "1544-6123",

publisher = "Elsevier Ltd.",

}

TY - JOUR

T1 - The Intraday Bitcoin Response to Tether Minting and Burning Events

T2 - Asymmetry, Investor Sentiment, and “Whale Alerts” on Twitter

AU - Saggu, Aman

PY - 2022/10

Y1 - 2022/10

N2 - 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.

AB - 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.

KW - Bitcoin

KW - Tether

KW - Asset Pricing

KW - Market Efficiency

KW - Stablecoins

KW - Event Study

UR - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4149655

UR - https://www.researchgate.net/publication/361557076_The_Intraday_Bitcoin_Response_to_Tether_Minting_and_Burning_Events_Asymmetry_Investor_Sentiment_and_Whale_Alerts_on_Twitter

UR - https://www.academia.edu/82441989/The_Intraday_Bitcoin_Response_to_Tether_Minting_and_Burning_Events_Asymmetry_Investor_Sentiment_and_Whale_Alerts_on_Twitter

UR - https://arxiv.org/abs/2501.05232

UR - https://orcid.org/0000-0003-2784-4353

UR - https://scholar.google.com/citations?view_op=view_citation&hl=en&user=JiGZFHQAAAAJ&citation_for_view=JiGZFHQAAAAJ:2P1L_qKh6hAC

UR - https://www.scopus.com/pages/publications/85133195313

UR - https://search.worldcat.org/title/9620525463

UR - https://ideas.repec.org/a/eee/finlet/v49y2022ics154461232200321x.html

UR - https://mahidol.elsevierpure.com/en/publications/the-intraday-bitcoin-response-to-tether-minting-and-burning-event

UR - https://www.altmetric.com/details/130828934?src=bookmarklet

UR - https://plu.mx/plum/a/?scopus_id=85133195313

U2 - 10.1016/j.frl.2022.103096

DO - 10.1016/j.frl.2022.103096

M3 - Article

AN - SCOPUS:85133195313

SN - 1544-6123

VL - 49

JO - Finance Research Letters

JF - Finance Research Letters

M1 - 103096

ER -

The Intraday Bitcoin Response to Tether Minting and Burning Events: Asymmetry, Investor Sentiment, and “Whale Alerts” on Twitter

Abstract

UN SDGs

Keywords

Access to Document

Other files and links

Fingerprint

Media contribution and media coverage for Saggu, A. (2022). The intraday bitcoin response to tether minting and burning events: Asymmetry, investor sentiment, and “whale alerts” on twitter. Finance Research Letters, 49, 103096. https://doi.org/10.1016/j.frl.2022.103096

Cite this

The Intraday Bitcoin Response to Tether Minting and Burning Events: Asymmetry, Investor Sentiment, and “Whale Alerts” on Twitter

Abstract

UN SDGs

Keywords

Access to Document

Other files and links

Fingerprint

Press/Media

Media contribution and media coverage for Saggu, A. (2022). The intraday bitcoin response to tether minting and burning events: Asymmetry, investor sentiment, and “whale alerts” on twitter. Finance Research Letters, 49, 103096. https://doi.org/10.1016/j.frl.2022.103096

Cite this