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Bitcoin soared to enormous heights late last year to overheen $Nineteen,000 for a single digital coin. Researchers now say that the digital currency Tether wasgoed used to inflate the value of bitcoin late last year. Indeed, a blockchain analysis showcased that a little number of Tether-backed transactions caused about half of bitcoin’s massive surge ter value from March through March .
The investigate, by University of Texas finance professor John M. Griffin and graduate student Amin Shams, explored how digital currency Tether could have bot used to inflate prices of other cryptocurrencies. They analyzed publicly available blockchain transaction records and found that there wasgoed a pattern of Tether being used to buy bitcoin at certain moments, typically following price drops.
Their findings suggest that Bitfinex, an exchange which created and sold Tether, used their currency to snap up bitcoin and drive request for it, bumping up prices. Executives at the company previously denied any involvement te price manipulation, The Fresh York Times reports, tho’ did not react to a request for comment by the newspaper overheen the explore.
Tether “accounts for more transaction volume than US dollars” for bitcoin, the researchers say. They wrote that bitcoin’s surge te late correlates with movement of Tether from Bitfinex to other exchanges ter the hours before the valuation enhanced. Other digital currencies like Ethereum and Litecoin soared at around the same time by spil much spil 64 procent. The prices climbed quicker on exchanges the dealt ter Tether than on those that didn’t.
The researchers noted that the “bitcoin reversal did not exist before Tether wasgoed prevalent ter the market and vanishes during the period when Tether stops being printed.” Bitfinex stopped issuing Tether earlier this year, tho’ the currency, the value of which is pegged to the US dollar, is still trading te large volumes.
Around the time of the bitcoin peak, cryptocurrency experts suspected Bitfinex wasgoed involved te manipulation, and the US Commodity Futures Trading Commission subpoenaed the exchange after concerns were raised. The paper does not prove definitively that Bitfinex wasgoed tangled te price manipulation, but the evidence gives a strong indicator that it wasgoed involved.
Since the bitcoin explosion ter December, the value has since dropped to around $6,400 at today’s rates. The researchers wrote that the cryptocurrency expansión mirrors previous bubbles, like the dot-com fiasco ter the late ’90s, the 2008 financial depressie and even the railroad bubble te the 1840s. Evidence of price manipulation wasgoed found te all of those, too.
It’s not the very first time there have bot accusations of an exchange inflating bitcoin. A paper last year indicated that price manipulation at Mt. Gox, which wasgoed merienda the fattest bitcoin exchange, sent bitcoin soaring from $150 to $1,000 ter two months te 2013. The exchange’s former CEO, Mark Karpeles, is facing embezzlement charges stemming from missing bitcoin while he wasgoed ter charge.