U.S. researchers claim bitcoin's price was manipulated during 2017 spike

14 June, 2018, 12:55 | Author: Eric Barnett
  • Record bitcoin price propped up by another digital currency

Market manipulators used Tether's USDT token to artificially inflate the bitcoin price during 2017's prolonged bull run.

Once issued, almost all tether was moved to Bitfinex and then shifted to other exchanges, where it was used to buy bitcoin, propping up the price, the paper said.

The report says that Tether, one of the most-traded cryptocurrencies, has shown a pattern of being spent on bitcoin at pivotal moments, helping to drive bitcoin to a record price in December, according to a Bloomberg report on the study, which was authored by finance professor John Griffin.

Or, in layman's terms: to counteract price declines, it looks like somebody at Bitfinex is using Tether to buy bitcoin.

BTC/USD is changing hands at $6,480, the price of the digital coin No. 1 recovered strongly from a new low reached late on Wednesday at $6,154.

As evidence for this claim, the Griffin and Shams note that there tends to be negative end-of-month pressure on the bitcoin price in months when a large number of tethers have been issued but not in others.


Bitcoin's massive price run-up late previous year may have been the result of a price manipulation campaign, according to a new study released on Wednesday. Essentially, the lack of transparency allowed bad actors in the market to create information (tether-funded bitcoin purchases) that they had access to, but the broader spectrum of investors did not.

Philip Gradwell, the chief economist at Chainalysis, a firm that analyses blockchain data, also said the study "seems credible". Most prominently, he drew media attention for a 2016 paper that suggested that a popular financial contract tied to the volatility in financial markets, known as the VIX, was being manipulated. A whistleblower later came forward to confirm those suspicions, and now several active lawsuits are focused on the allegations.

If what the study hypothesis turns out to be true this would not be the first time Griffin has sniffed out fraud in the financial world. Since exchanges often face difficulties finding the banking partners and achieving the regulatory compliance necessary to offer fiat-to-crypto trading pairs, many altcoin exchanges use tether as a proxy for physical Dollars.

The new paper is not the first academic work to identify manipulation in the virtual currency markets.

"There were obviously tremendous price increases past year, and this paper indicates that manipulation played a large part in those price increases".

Recommended:

  • George Lucas Had Third Star Wars Trilogy Plans That Sound Terrible

    George Lucas Had Third Star Wars Trilogy Plans That Sound Terrible

    More recently we've learned that he's enlisted the help of veteran Star Wars artists Doug Chiang and Andrew L. He says he could have made the films had he kept onto the company.
    Why Niall Aslam left Love Island 2018 villa 'revealed'

    Why Niall Aslam left Love Island 2018 villa 'revealed'

    His exit will be aired during tonight's show, and it's up to Alex to reveal the devastating news to the rest of the Islanders. The show airs Sunday-Fridays at 9PM with spin-off Aftersun at 10PM on Sunday nights.

    Rising fuel prices spur inflation in May

    The rate of inflation was unchanged last month at 2.4% despite a surge in fuel costs, according to official figures. Based on Consumer Price Index (CPI), the retail inflation was at 4.58 per cent in the preceding month, April.
  • John Cena to star in action thriller movie with Jackie Chan

    John Cena to star in action thriller movie with Jackie Chan

    Chan will also produce " Project X " along with Joe Tam, Esmond Ren, and Hans Canosa. Scott Waugh is directing it from a script by Arash Amel.

    Rolls-Royce to cut 4,600 jobs mainly in Britain

    He has already cut out layers of Rolls's bloated management, having previously said that the company was too slow to respond to. The restructuring will reduce the number of management roles, and that engineering jobs will also be affected.
    Don’t Be Afraid to Talk With Someone

    Don’t Be Afraid to Talk With Someone

    According to TheHill.com , an estimated 400 physicians took their lives in 2016. Nationally, suicide rates increased in almost every state from 1999 to 2016.
  • Italy threatens to CANCEL Macron meeting as tensions SOAR in immigration clash

    Italy threatens to CANCEL Macron meeting as tensions SOAR in immigration clash

    That has put pressure on Italy and Greece, the entry points for hundreds of thousands of people fleeing war and poverty. The row centres on the charity ship Aquarius , which both Italy and Malta refused to let dock at their ports.

    Trump Declares Oil Prices 'Too High,' Blames OPEC

    Russian Federation and Saudi Arabia are set to open the football world cup, which kicks off in Russian Federation on Thursday. President Donald Trump on Wednesday tweeted about oil prices , stating "Oil prices are too high, OPEC is at it again".
    Saudi Arabia says new Yemen missile intercepted

    Saudi Arabia says new Yemen missile intercepted

    Yemeni security officials say gunmen shot dead a pro-government army colonel in the southwestern city of Taiz. The conflict has left almost 10,000 people dead in Yemen, already the Arab world's poorest country.
  • Dominic Thiem hails 'awesome' King of Clay Nadal after French Open defeat

    Dominic Thiem hails 'awesome' King of Clay Nadal after French Open defeat

    Roland Garros runner-up Dominic Thiem also improved his ranking by a solitary rung, finding himself in the seventh spot. At the following changeover, he was given a salt pill by a doctor and had his left forearm massaged by a trainer.

    Wetherspoon to stop selling champagne ahead of Brexit

    Pub chain Wetherspoon is to sell more drinks from the United Kingdom and non-EU brewers in the run up to Brexit . Under the plan, British wheat beer and alcohol-free beer will replace the current beers brewed in Germany.
    Medical Device Stocks Pop On Boston Scientific Corporation (BSX) Takeover Rumors

    Medical Device Stocks Pop On Boston Scientific Corporation (BSX) Takeover Rumors

    Furthermore, the percentage of stocks above their 50-day moving average helps determine the overall health of the market. Commonwealth Equity Services LLC grew its position in shares of Boston Scientific by 2.7% during the 1st quarter.


Popular

Leicester City Travel To Manchester United In 2018/19 Premier League Opener
Arsenal and Chelsea will play a pre-season friendly in Dublin later this summer. That hasn't, however, stopped the club preparing our pre-season plans.

Kim Kardashian meets with Memphis-area woman she helped free from prison
Trump pardoned Johnson last Wednesday. "The most incredible, amazing, overwhelming moment of my life", Johnson told CBS This Morningof the phone call.

Tesla to Cut 9% of Workers Across Company
The CEO wrote that those Tesla employees working in Home Depot locations would be offered the chance to work at its own stores. Yesterday, Elon Musk revealed Tesla is to cut 9% of its workforce, in a move that'll see thousands of people lose their jobs.

The United States, Mexico And Canada Will Host The 2026 World Cup
For the first time in more than 30 years, the USA men's national soccer team will not compete, after failing to qualify . Saudi Crown Prince Mohammed bin Salman headed to Moscow on Thursday to attend the opening of Russia's World Cup 2018 .

Please, NASA, don’t take my moon dust away
One test found that the dust "mineralogy is consistent with the known composition of lunar regolith", according to the suit. As for Cicco, her lawsuit is ongoing, and her vial of moon dust is being held in a safe location, according to the Post .

Johnson regains World No.1 ranking
A T13 at the Memorial Tournament presented by Nationwide and a deep finish yesterday to be third in Memphis has Holmes trending. Open title having triumphed two years ago. "Winning this week has given me more confidence than being number one in the world".

Fekir was so confident of Liverpool transfer he’d already chosen shirt number
Liverpool have managed to complete a deal for Fabinho from AS Monaco with Naby Keita also due to join from RB Leipzig on July 1. Liverpool have conceded defeat in their transfer pursuits of Jan Oblak and Alisson , reports say.

Surface Pro Now At Its Lowest Price Ever
The Surface Pro is no stranger to deals, but prior to today the cheapest price we've seen for it has been $670 (back in April). It's supposed to be an affordable Windows 10 PC that would compete directly against Chromebooks and Apple's iPad .

Former propaganda artists for North Korea denounce Trump-Kim meeting
It calls for the two countries to jointly work on efforts to build a lasting peace on the Korean Peninsula, to establish new U.S. In a split-screen shot, Kim Jong Un waved to an adoring crowd while President Trump stood beside him with his thumb in the air.

Adult Danny Torrance Cast in Stephen King's DOCTOR SLEEP
Warner Bros is pressing ahead with a movie take on The Shining sequel novel, and it's just recruited Ewan McGregor to star. Stanley Kubrick directed the original adaptation of " The Shining ", starring Jack Nicholson and Shelley Duvall .