The record growth in bitcoin previous year was actually a coordinated market manipulation, according to recent research by University of Texas Finance Professor John Griffin. That's according to explosive new research from University of Texas finance processors John Griffin and Amin Shams, best known for identifying suspicious activity in the VIX previous year.
Writing in a 66-page report titled "Is Bitcoin Really Un-Tethered?", Griffin and Shams argue that tether, a "stablecoin" that is allegedly backed by Dollars at a 1:1 ratio, has been repeatedly used to provide price support for bitcoin during market downturns. "Such heavy Tether transactions are associated with 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies", the researchers claim.
"(Neither) Bitfinex nor Tether is, or has ever, engaged in any sort of market or price manipulation", Bitfinex and Tether Chief Executive Officer JL van der Velde said in a statement. It was at $6,624.45 on Wednesday afternoon. They wrote that bitcoin's surge in late 2017 correlates with movement of Tether from Bitfinex to other exchanges in the hours before the valuation increased. When bitcoin was rising, the same pattern could not be found.
Their findings suggest that Bitfinex, an exchange which created and sold Tether, used their currency to snap up bitcoin and drive demand for it, bumping up prices.
The researchers used algorithms to analyze data from blockchains, the decentralized ledgers that underpin bitcoin and other virtual currencies, between the beginning of March 2017 to the end of March 2018.
Bitfinex has denied being involved in any price manipulation schemes. Bitfinex stopped issuing Tether earlier this year, though the currency, the value of which is pegged to the United States dollar, is still trading in large volumes.