SOURCE: Click here to read the full original post

New research out of the University of Texas alleges that the price of Bitcoin throughout its bull run in 2017 was being manipulated using Bitfinex’s Tether currency.

Tether May Have Been Used to Prop Up Bitcoin

A recently published paper by Professor John Griffin and graduate student Amin Shams examined the traffic of cryptocurrencies on the Bitfinex exchange and found a correlation between price slumps in Bitcoin and other coins and instances when Tether was issued and sold by the owners of the exchange. The paper alleges that these instances may account for about 50% of the price increases of Bitcoin and 64% of others trading in the top ten.

Professor Griffin emphasized that the pattern of transactions that he and his research partner found played a significant role in last years unprecedented price gains in the crypto market in a recent interview with the New York Times. He told the paper,

“There were obviously tremendous price increases last year, and this paper indicates that manipulation played a large part in those price increases.”

Tether, as its name suggests, is pegged to the value of the US dollar and can be used to buy other crypto coins. J.L.. Van der Velde responded to the accusation in the paper with a statement that reads “Tether issuances cannot be used to prop up the price of Bitcoin or any other coin/token on Bitfinex,”

The study performed by the Texas researchers focused in on 87 separate instances between March 2017 and March 2018 when Tether moved from Bitfinex to other exchanges. The research found that “these 87 events account for less than 1 percent of our time series (over the period from the beginning of March 2017 to the end of March 2018), yet are associated with 50 percent of bitcoin’s compounded return, and 64 percent of the returns on six other large cryptocurrencies (Dash, Ethereum Classic, Ethereum, Litecoin, Monero and Zcash).”

Researchers Find Market Manipulation

If what the study hypothesis turns out to be true this would not be

SourceNEWSBTC - click here to read the rest of this article