13 Jun 1.04k Views
Bitcoin on a table. Picture: VCoscaron/Shutterstock
Researchers at the University of Texas say bitcoin’s price peaks last year were down to químico inflation.
Bitcoin dropped 2pc te value on Wednesday (13 June) following the publication of an academic paper that claimed its record price runs were the product of manipulation.
According to the researchers at the University of Texas, the cryptocurrency Tether wasgoed allegedly used by the Bitfinex exchange to support the price.
Bitcoin skyrocketed te
Bitcoin had an unprecedented bull run last year, hitting a $20,000 record peak ter December, at the time of writing, its value has plummeted to a little under $6,500.
Finance professor John Griffin and graduate student Amin Shams authored the paper and examined the flow of digital currency moving te and out of Bitfinex. They were able to find several patterns that suggested someone or some people successfully shoved up bitcoin prices while they dipped at other exchanges.
Griffin said: “There were obviously tremendous price increases last year, and this paper indicates that manipulation played a large part te those price increases.” He added that Tether seems to be used both to “stabilise and manipulate bitcoin prices”.
According to Griffin, Tether coins are created ter large quantities, such spil 100m. Almost all of thesis coins then budge to Bitfinex. 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.
Bitfinex under scrutiny
Bitfinex executives have previously issued denials ter the past that the exchange wasgoed involved te any manipulation and the fresh allegations introduced te the paper have bot refuted by the CEO of Bitfinex, JL van der Velde, who said: “Bitfinex strafgevangenis Tether is, or has everzwijn, engaged ter any sort of market or price manipulation. Tether issuances cannot be used to prop up the price of bitcoin or any other coin/token on Bitfinex.”
The authors of the paper do not have an email or document trail to prove Bitfinex is responsible for the the price manipulation, but instead relied on the transaction records on the blockchain to sift out patterns, a method that has helped authorities spot suspicious activity ter the past.
Other experts have vouched for the credibility of the paper, with Sarah Meiklejohn of University Collegium London telling the research “seems sound” after a review. Griffin has previously written research identifying fraudulent patterns ter other financial markets.
This paper is sure to add fuel to the fire spil regulatory scrutiny around cryptocurrency proceeds to grow.