Posted on 06/14/2018 10:29:50 AM PDT by NRx
Bitcoin's epic rise last year may have been more than investor fervor. A study published Wednesday says at least half of the jump in bitcoin was due to coordinated price manipulation.
University of Texas finance professor John Griffin, who has a 10-year track record of spotting financial fraud, and graduate student Amin Shams examined millions of transactions on cryptocurrency exchange Bitfinex. In a 66-page paper, the authors found that tether was used to buy bitcoin at key moments when it was declining, which helped "stabilize and manipulate" the cryptocurrency's price.
"Fraud and manipulation often leave footprints in the data and it's nice to have the blockchain to track things," Griffin told CNBC.
By tracking Bitfinex transactions, which are recorded on a public ledger, Griffin found that another cryptocurrency, tether. was used to buy bitcoin after large price falls. The authors tracked that pattern and found periods of suspicious bitcoin price activity tied to the issuance of tether, which is purportedly pegged to the value of the U.S. dollar.
"It was creating price support for bitcoin, and over the period that we examined, had huge price effects," Griffin said. "Our research would indicate that there are sophisticated people harnessing investor interest for their benefit."
Griffin found that about 87 hours, or about 1 percent, of heavy tether trading could explain 50 percent of the rise of bitcoin, and around 64 percent of the rise of other major cryptocurrencies.
Bitcoin rose to almost $20,000 in December after starting last year below $1,000. This year, the world's first and most popular cryptocurrency has lost more than half its value, trading near $6,252 on Wednesday afternoon, according to CoinDesk.
(Excerpt) Read more at cnbc.com ...
Keep up the price game until the music stops then someone gets stuck with the check.
What? Shocked! Shocked I am. No one saw that coming...
Ya think?
It’s called “Pump and Dump”.
Anyone considering exotic investments like this should use only money they don’t mind losing.
I told everyone it was a pyramid scam at the very start. From a technical point of view it was quite obvious that at some point mining would be unprofitable and the infrastructure necessary to support transactions would disappear, leaving every BTC holder with an empty bag.
May be of interest.
Bitcoin Collapse Accelerates.
No surprise. It is for scammers, laundering, and illegal activity, to hide money, avoid taxes, etc. A den of thieves behaves like a den of thieves.
The Buy low and Sell high worked for some ,LOL
Whoa, so will clawbacks be a possibility down the line? That’s going to cause a lot of people a lot of pain.
Thinly traded marked are easier to manipulate.
Not peculiar to bit coin. Wall Street loves their games. Especially with IPOs. Send it out the gate with massive support, get the sucker retail investors in, then let it go.
IOW, Pump & Dump.
I never understood Bitcoin. And I don’t understand Bitcoin miners. Apparently Bitcoin miners perform various mathematical calculations, to solve problems, and their reward is more Bitcoin for their efforts.
It doesn’t make a lot of sense to me. What asset is created, what value is created, what good or services are being created and paid for with Bitcoin? Who decided that working on your computer to mine Bitcoin would be paid in Bitcoin for their efforts? Why does anyone do that?
currency system based on vapor (a fad) eventually face disaster.
BTW, those ‘Quantum Computer’ machines being developed (google it) will SOON be powerful enough with their peculiar processing abilities to eliminate/bypass/irrelevantize the whole calculation thing/methodology/mechanism that Bitcoins and other crypto-currencies are based on.
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