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Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says:
A Texas academic created a stir last year by alleging that Bitcoin's astronomical surge in 2017 was probably triggered by manipulation. He's now doubling down with a striking new claim: a single market whale was likely behind the misconduct, seemingly with the power to move prices at will.
One entity on the cryptocurrency exchange Bitfinex appears capable of sending the price of Bitcoin higher when it falls below certain thresholds, according to University of Texas Professor John Griffin and Ohio State University's Amin Shams. Griffin and Shams, who have updated a paper they first published in 2018, say the transactions rely on Tether, a widely used digital token that is meant to hold its value at $1.
"Our results suggest instead of thousands of investors moving the price of Bitcoin, it's just one large one," Griffin said in an interview. "Years from now, people will be surprised to learn investors handed over billions to people they didn't know and who faced little oversight."
Tether rejected the claims, with General Counsel Stuart Hoegner arguing in a statement that the paper is "foundationally flawed" because it is based on an insufficient data set. The research was probably published to back a "parasitic lawsuit," the general counsel added.
[...] Griffin and Shams's hypothesis that Bitcoin was manipulated is based partly on the theory that new Tethers are created without the dollars to back them and then used to buy Bitcoin, leading to rising prices. The authors examined Tether and Bitcoin transactions from March 1, 2017 to March 31, 2018, concluding that Bitcoin purchases on Bitfinex increased whenever Bitcoin's value fell by certain increments. Griffin and Shams didn't name the entity on Bitfinex that they think was responsible. They shared their updated research with Bloomberg News.
[Ed Note: If, like me, you didn't understand the term 'Whale' in the title then try this link for an explanation.--JR]
(Score: 4, Interesting) by JoeMerchant on Monday November 04 2019, @09:44PM (2 children)
When has it ever been different? The silver market was manipulated (pumped up wildly) by a Texas millionaire back in the 70s, thousands, perhaps millions of small investors lost money when the Federal government dumped silver from Ft. Knox onto the market to bring the price back down.
Stocks? they can't create rules fast enough to attempt to curtail insider trading and similar manipulations. Options and other thinly traded instruments? The whole game there is reading the other players in the market to guess how they're going to make it jump - usually other players you do not know and have little to no information about.
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Monday November 04 2019, @11:09PM
The plunge protection team is at work doing the same thing with stocks.
(Score: 0) by Anonymous Coward on Tuesday November 05 2019, @06:46AM
Come now, AC, we really need to memorialize their names,
Nelson, William Herbert, and Lamar, Republicans all. And what happened? How many of these funching Texan Republicans were jailed? Just like th Cock Bros. (Minus one now, so sad!) But now just think, all the Feds have to do, is release mass amounts of bitcoin from Ft. Knox, or the Cheyenne Mountain Complex, or wherever they keep the actual BitCoins. Problem solved!