The latest study shows that only one Whale caused the previous $20,000 Bitcoin Bull-run in 2017 which subsequently caused a parabolic price surge on the market as we reported back then in the Bitcoin price news.
According to two US-based academics, the price movement was manipulated by only one whale. The topic of price manipulation in the crypto market has been around for a few years now and the finance professor John M. Griffin from the University of Texas and assistant professor of finance at the Ohio State University Amin Shams conducted that the new study that shows how the price actions may have been manipulated.
The initial research was published in 2018 and said that the price surge in 2017 was caused ‘probably by market manipulation.’ However, the latest study shows that one of the most used stabelcoins, Tether (USDT) was used to inflate the bitcoin price artificially and by analyzing the crypto investments, the US academics found out that a lot of Tether purchases were timed with the declines in the market in order to stabilize the bottom.
The same paper was updated recently where it says that the price manipulation was caused by one large entity and it was apparently carried out on the cryptocurrency exchange Bitfinex. According to the study, we can read:
“Our results suggest instead of thousands of investors moving the price of Bitcoin, it’s just one large one. Years from now, people will be surprised to learn investors handed over billions to people they didn’t know and who faced little oversight[…] 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.”
The researchers also refer to the possibility that not all tether is backed by traditional currencies. One parent company called iFinex owns both Tether and Bitfinex and there have been a lot of controversies surrounding them. A lawsuit was even filed in April this year from the US Justice Department and the accusation was due to the covering of an $850 million loss by accessing at least $700 million worth of USDT tokens from the Tether reserves.
The case noted there were several delays with some information needed that still has to see a conclusive resolution. BitFinex also won a motion in front of the New York supreme court which means that the company won’t have to provide any documents about the usage of tether until further notice.
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