Stablecoins, usually represented by and associated with the dominant Tether (USDT) token, have evolved into an important mechanism of the whole cryptoassets system, with their main objective being to enable easy transactions between cryptoasset exchanges with a stable exchange rate mostly through pegging to and being backed by a fiat currency or a physical asset. This backing itself has become a controversial topic for the most dominant stablecoin, and its role in the 2017 skyrocketing cryptoasset prices has attracted many speculations in the community. However, the actual research interest in stablecoins and their role in cryptoasset price dynamics has been rather scarce. Herein, we provide a detailed analysis of interactions and dynamics between a set of 28 stablecoins, Bitcoin as the most dominant cryptoasset, and altcoins to examine whether stablecoins in fact induce price movements. We provide evidence that stablecoins mostly reflect an increasing demand for investing in cryptoassets rather than serve as a boosting mechanism for periods of extreme appreciation. We further discuss some specificities of 2017, even though the general dynamic patterns remain very similar to the general behavior. Overall, we do not find support for various scandalous claims about stablecoins.
