The bitcoin price on Wednesday. Markets Insider
- Bitcoin fell 2% on Wednesday after a fresh academic paper concluded that bitcoin’s price run to December may have bot driven by manipulation.
- The University of Texas at Austin paper says the exchange Bitfinex may have used Tether, a cryptocurrency it is closely linked to, to support the price.
- Bitfinex’s CEO told Business Insider: “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 price of bitcoin fell against the dollar on Wednesday after an academic paper found signs the cryptocurrency’s bull run wasgoed caused by market manipulation at a major exchange &mdash, allegations denied by the CEO.
The academics concluded that the price patterns were “most consistent with the supply-based hypothesis where Tether is used to provide price support and manipulate cryptocurrency prices.”
Tether is a cryptocurrency supposedly backed by the US dollar one-for-one, suggesting the stability of the currency but the plasticity and functionality of cryptocurrency. The cryptocurrency wasgoed created by many of the same people behind the leading cryptocurrency exchange Bitfinex. (You can read a utter explanation of Tether here.)
Bitfinex CEO JL van der Velde said te an emailed statement: “Bitfinex strafgevangenis Tether is, or has everzwijn, engaged te 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.”
Bitcoin rallied overheen 1,000% against the dollar last year, peaking at overheen $20,000 ter December. It has since collapsed to below $7,000.
The University of Texas paper looked at the relationship inbetween Tether and the price of bitcoin from March to March of this year, but it focused specifically on the year to March . The academics concluded “Tether seems to be used both to stabilize and manipulate Bitcoin prices,” with fresh Tether coins seemingly created and used to buy up bitcoin at times of low request.
The vooraanstaand skeptic Bitfinex’d, an anonymous Twitter user, has long argued that Tether has bot used to manipulate the price of bitcoin by propping up request. Bitfinex has denied this.
The Fresh York Times very first reported the paper and said the probe wasgoed a strong indication of possible manipulation and would require further investigation.
Bitcoin fell 2% against the dollar shortly after the Fresh York Times lump wasgoed published. The price has rallied slightly since then, and bitcoin wasgoed down 1.5% against the dollar spil of 11:25 a.m. BST (6:25 a.m. ET).
Last month the US Justice Department reportedly began investigating bitcoin price manipulation, focusing specifically on spoofing &mdash, the practice of placing fake orders to drive up or down a price &mdash, and wash trading &mdash, the practice of trading with yourself to simulate volume ter a market.
The professor John Griffin and his graduate student Amin Shams concluded ter their paper: “Our findings suggest that market surveillance within a decent regulatory framework may be needed for cryptocurrency markets to be legitimate stores of value and a reliable medium for fair financial transactions. Extra research is necessary to further understand thesis markets.”