Bitcoin's Major Boost Was Likely Manipulated, Research Finds

Record bitcoin price propped up by another digital currency

A concentrated campaign of price manipulation may have accounted for at least half of the increase in the price of bitcoin and other big cryptocurrencies a year ago, according to a paper released on Wednesday by an academic with a history of spotting fraud in financial markets.

Scientists at the University of Texas analysed transactions on Bitfinex, where Bitcoin can be bought and sold and identified patterns which suggest that the prices were successfully pushed up when they slumped at other exchanges, by using another virtual currency called Tether.

The paper by John Griffin, a finance professor at the University of Texas, and Amin Shams, a graduate student, is likely to stoke a debate about how much of bitcoin's skyrocketing gain a year ago was caused by the covert actions of a few big players, rather than real demand from investors.

"By mapping the blockchains of bitcoin and tether, we are able to establish that entities associated with the Bitfinex exchange use tether to purchase bitcoin when prices are falling".

More news: Sarah Huckabee Sanders responds to report she’s leaving the Trump administration

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.

In December, the CFTC sent subpoenas to Tether and Bitfinex, a popular cryptocurrency exchange that is affiliated with, and shares executives with, Tether. This allowed the researchers to map how tether was distributed, and how it impacted bitcoin prices.

According to Griffin, Tether coins are created in large quantities, such as 100m. That's according to explosive new research from University of Texas finance processors John Griffin and Amin Shams, best known for identifying suspicious activity in the VIX past year. In a nutshell, trades of Tether were "timed following market downturns" triggering "sizable increases in Bitcoin prices". New analysis indicates that this is one of the most important factors that drove bitcoin's rally a year ago.

Again, in plain language: in periods right after the bitcoin price falls and Tether mints a bunch more USDT, that's when it's clear that somebody (who could it be?!) is artificially pushing the bitcoin price back up. He is most notably recognized for a 2016 paper that found manipulation in a financial contract known as VIX which was tied to flux in financial markets which were later confirmed by a whistleblower. When bitcoin prices dip after the Tether is issued, Tether at Bitfinex and other exchanges is used "in a coordinated way", causing the price of bitcoin to shoot up.

Related News:



Most liked

Italy accepts 900 migrants but 600 more continue onto Spain
That has put pressure on Italy and Greece, the entry points for the hundreds of thousands of people fleeing war and poverty. The ship had been drifting in the central Mediterranean since Sunday, when both Italy and Malta closed their ports to it.

Mourinho to allow Anthony Martial to leave if he lands Gareth Bale
Martial moved to Manchester from Monaco for £36 million in September 2015 , but has been in and out of the side ever since. Today, Anthony is disappointed because he demonstrated for three seasons his love for the club and its supporters.

India vs Afghanistan, one-off Test
Karthik has appreciated the spirit of Afghanistan players as he felt they have flourished themselves in conditions of turmoil. Though they will be playing their first worldwide Test match, they could still have a meaningful impact on the result.

Rebel Wilson damages slashed on appeal
The actress she won her defamation case against Bauer Media in September a year ago . The Sydney Morning Herald said the articles "painted her as a serial liar".

Pogba set to start for France in World Cup opener
As midfield players you need to defend first and that is what he is doing, he is focusing on the team . Everyone knows about his extraordinary potential but I think we're asking too much of him.

Apple to close iPhone security loophole used by police to access devices
Apple has said it will change iPhone settings to block a method used by police and intelligence agencies to break into devices. Apple has been at the forefront of a battle between tech companies and law enforcement to hand over data in extreme cases.

Google Home speakers can now handle three commands at once
This meant you didn't have to keep saying "Ok, Google" with each individual command, making everything a bit more streamlined. At the Google I/O 2018 , the company had announced the multiple actions feature , but it has just started to roll out now.

Nearly bezelless Vivo NEX comes with pop-up camera
It is preloaded with Android 8.1 Oreo that is overlaid with custom user interfaced called Energy UI that is driven by AI. The Vivo NEX is powered by 4,000mAh battery that is enabled with support for 22.5W fast charging through USB-C.

Don’t Be Afraid to Talk With Someone
Try to get the person to seek help from a doctor or the nearest hospital emergency department or dial 911. Subsequently, "escort" him or her to a superior officer, mental health specialist, or religious figure.

Call of Duty: Black Ops 4 Special Editions Revealed
This might be confusing for those that buy the standard edition of the game and want to get the season pass down the line. Instead of four separate content downloads, expect more robust and more frequent availability of maps and other content.

Microsoft Office 2019 Commercial Preview Now Available for Mac Users
Once Microsoft collects feedback from those users, it will roll out the changes to everyone else. Fans of the classic design will be able to expand it back to the larger ribbon if they choose.

Apple could launch an affordable iPhone X this year: KGI Securities
As for the low-priced iPhone, it might feature dimensions of 147.12 x 71.52mm, longer and wider than the first-gen iPhone X. While the flash hasn't been depicted in the images, it claims the module will be on the right side of the setup.

United States blacklists Russian firms tied to FSB hacking ops
Digital Security has some major clients, including Yandex, QIWI, Mail.ru Group, Tele2, and SAP. Washington also added the companies ERPScan and Embedi as subsidiaries of Digital Security.

American Toddlers Eat So Much 'Added Sugar' That They Exceed Adult Recommendations
As for children under the age of 2, it is recommended that they avoid eating foods containing added sugar altogether. Regardless of the recommendations, most people in the USA eat more than this limit, research shows.

Tyson Fury will fight on Carl Frampton undercard on August 18
His corner chose to spare the Albanian from further drawn-out punishment by withdrawing him at the end of the fourth round. Fury's skills are still intact, although they lacked the zip and zing of his win over Klitschko.