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Study Suggests Bitcoin Price is Being Manipulated

posted by mrpg on Thursday June 14 2018, @04:39AM   Printer-friendly
from the fake-money-fake-news dept.

hubie writes:

The price of Bitcoin went on a tremendous bull run that peaked in late 2017. The New York Times is reporting that an academic paper suggests that the price of Bitcoin was being manipulated. They argue that the sudden gain in value in Bitcoin and other virtual currencies in the last year was caused by a small group of participants, particularly the cryptocurrency exchange Bitfinex.

Mr. Griffin looked at the flow of digital tokens going in and out of Bitfinex and identified several distinct patterns that suggest that someone or some people at the exchange successfully worked to push up prices when they sagged at other exchanges. To do that, the person or people used a secondary virtual currency, known as Tether, which was created and sold by the owners of Bitfinex, to buy up those other cryptocurrencies.

This paper follows another paper published in 2017 that tied the sudden and large increases in Bitcoin value seen in late 2013 to manipulation by the currency exchange M. Gox.

Original Submission

 
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  • (Score: 2) by bobthecimmerian on Thursday June 14 2018, @12:33PM (6 children)

    by bobthecimmerian (6834) on Thursday June 14 2018, @12:33PM (#692848)

    Bitcoin was cheaper with transfers up until some point in the past year or two. Now most places have the equivalent of $10+ in transfer fees. Most of the other cryptocurrencies are still cheaper with transfers, but their value is more volatile than that of Bitcoin.

    If any of these currencies reach such a wide usage that many hundreds of billions of dollars in business was transacted in them every day, I would expect the prices to stabilize because it would be cost-prohibitive to manipulate the currency. Until then, it's just another form of gambling.

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  • (Score: 0) by Anonymous Coward on Thursday June 14 2018, @02:08PM (5 children)

    by Anonymous Coward on Thursday June 14 2018, @02:08PM (#692907)

    "most places have... transfer fees"? You clearly arent even using bitcoin, there is no such concept... Why are there so many clueless people who claim to have tried using bitcoin these days?

    • (Score: 1, Informative) by Anonymous Coward on Thursday June 14 2018, @02:21PM (4 children)

      by Anonymous Coward on Thursday June 14 2018, @02:21PM (#692920)

      December, 2017.

      https://www.cnbc.com/2017/12/19/big-transactions-fees-are-a-problem-for-bitcoin.html [cnbc.com]

      Big transaction fees are a problem for bitcoin — but there could be a solution

              People are currently paying $28 on average to make transactions using the digital currency, according to data by BitInfoCharts.
              One person claimed on Twitter that he had to pay a $16 fee to send $25 worth of bitcoin from one bitcoin address to another.
              A debate has been brewing among the bitcoin community surrounding transaction speeds and fees.

      https://arstechnica.com/tech-policy/2018/02/bitcoins-transaction-fee-crisis-is-over-for-now/ [arstechnica.com] - February, 2018.

      The median daily transaction fee on the bitcoin network fell to $0.79 on Sunday, a six-month low. That represents a dramatic 97-percent decline from the peak of $34 reached on December 23. The median daily bitcoin transaction fee was more than $10 from mid-December until mid-January but has been declining steadily since then.

      The high fees of the last few months have been a crisis for the bitcoin network. Bitcoin fans once touted the network's near-zero fees as a selling point. But as fees soared in late 2017, businesses started backing away from the network.
      Further Reading
      Skyrocketing fees are fundamentally changing bitcoin

      Video game maker Valve stopped accepting bitcoin payments for its Steam platform in December, writing that "it has become untenable to support Bitcoin as a payment option." That same month Bitpay, a company that accepts bitcoin payments on behalf of merchants, announced that it was setting a minimum transaction size of $100—though the company quickly cut the minimum to $5 in response to customer outrage. Stripe, a major credit card processor, stopped accepting bitcoin payments for customers in January, arguing that thanks to high fees, there were "fewer and fewer use cases" for the payment network.

      Thanks for playing. Buh-bye.

      • (Score: 0) by Anonymous Coward on Thursday June 14 2018, @02:28PM (2 children)

        by Anonymous Coward on Thursday June 14 2018, @02:28PM (#692925)

        So what are these "most places" who are charging the fees?

        • (Score: 2) by maxwell demon on Friday June 15 2018, @04:45AM (1 child)

          by maxwell demon (1608) on Friday June 15 2018, @04:45AM (#693335) Journal

          Where are the miners? That's where those places are.

          --
          The Tao of math: The numbers you can count are not the real numbers.

          • (Score: 0) by Anonymous Coward on Friday June 15 2018, @03:38PM

            by Anonymous Coward on Friday June 15 2018, @03:38PM (#693536)

            Ok, lets end this charade. We all know that the original poster was actually using coinbase/etc services built on top of bitcoin while never using bitcoin itself.

      • (Score: 0) by Anonymous Coward on Thursday June 14 2018, @03:08PM

        by Anonymous Coward on Thursday June 14 2018, @03:08PM (#692948)

        The fastest and cheapest transaction fee is currently 30 satoshis/byte, shown in green at the top.
        For the median transaction size of 225 bytes, this results in a fee of 6,750 satoshis

        https://bitcoinfees.earn.com/ [earn.com]

        The current median fee is 0.00000001*6750*6400 = .432 usd. Looking at the distribution I see many transactions going through for 1 - 6 satoshis/byte (~1-10 cents) if you are willing to wait an hour or so for a confirmation (which is fine for most transactions, credit/debit card and ACH transactions can be reversed at least 6 months later and its possible there really is no final confirmation).