Bitcoin whale may have manipulated coin’s price to spur 2017 bull run

Bitcoin whale may have manipulated coin’s price to spur 2017 bull run

Bitcoin whale may have manipulated coin’s price to spur 2017 bull run

The same academic who, a year ago claimed that Bitcoin's 2017 bull run was sparked by market manipulation, is now saying that the cryptocurrency's astronomical surge was caused by a single individual. The development was reported by Bloomberg on November 4.

University of Texas Professor John Griffin and Ohio State University's Amin Shams shared their updated research paper with Bloomberg where they double down on past claims that Tether, the biggest stablecoin issuer, was the sole reason the Bitcoin price surged to its insurmountable all-time high of $20,000 at the end of 2017. Griffin and Shams now tell Bloomberg that just a single whale was likely behind the behavior.

Rather than indicating demand from cash investors, they argued that these patterns aligned with a "supply-based hypothesis of unbacked digital money inflating cryptocurrency prices". This was their finding in a paper published in 2018, a paper that has since been updated. They claim to have found a pattern "only present in periods following large printing of Tether, driven by a single large account holder". "This one large player or entity either exhibited clairvoyant market timing or exerted an extremely large price impact on Bitcoin that is not observed in aggregate flows from other smaller traders", it adds. The company's General Counsel Stuart Hoegner said that the paper was "foundationally flawed" as it relied on an insufficient data set. Furthermore, Tether minted 2.8 billion USDT from 2017 to 2018 and used the token to "flood the Bitfinex exchange and purchase other cryptocurrencies".

Bitcoin's rise as a form of digital currency was solidified by the cryptocurrency's massive hike in 2017. Though charged by the Commodity Futures Trading Commission and the US Justice Department in 2017 for its use in market manipulation, Tether was acquitted at last.

In her lawsuit, New York Attorney General Letitia James said Tether and Bitfinex executives participated in a cover-up after about US$850 million in client and corporate funds allegedly went missing.

The researchers, however, did not name the suspecting party involved in the price manipulation.

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