Newly issued Tether arriving at exchanges can be used to buy Bitcoin just as much as existing Tether can be. But making this distinction shows that in the current market, fiat would be driving Bitcoin buying to an even greater extent if there had not been new Tether issuance arriving at exchanges, shown by the difference between the yellow and pink lines.
Source: Chainalysis Market Intel newsletter.
Gradwell posited that the price change is mostly affected by the inflow of fiat into the market: "At present, the data suggest the current price increase is driven by fiat demand." Thus he concludes, that if Tether had not been creating new coins, more fiat would have entered the market. Though this may be true, it is also possible that at least some of the buyers who buy Bitcoin with Tether would have used other stablecoins or just stayed away completely.
According to the firm's data:
Over the last year, the value of Tether sent to exchanges equaled 48% of the value of Bitcoin sent to exchanges. So there was enough Tether to buy almost half of the Bitcoin for sale.
Gradwell concluded that the other half must have been acquired with fiat, arguing that the role of the other Bitcoin trading pairs was insignificant. Allegations had previously been levied against Bitfinex and Tether, accusing them of Bitcoin price manipulation.