Researchers Reach Obvious Conclusion That Bitcoin's Price Was Artificially Inflated

Bitcoin New Research Claims Bitcoin Price was Manipulated using Tether  John Mc Mahon

Bottom line: Remember when Bitcoin hit its highest price of over $19,000 a year ago? Price manipulation and collusion may be to blame.

Tether [USDT], one of the most traded cryptocurrencies supported by platforms like Bitfinix, ShapeShift, Bittrex, and Omni, shows an indication of being spent on Bitcoin in its critical moments, according to research by a University of Texas professor. The manipulation was so successful that it accounted for at least 50 percent of the gains Bitcoin and other cryptocurrencies such as Ethereum made over the a year ago. He added that Tether seems to be used both to "stabilise and manipulate bitcoin prices". Since exchanges often face difficulties finding the banking partners and achieving the regulatory compliance necessary to offer fiat-to-crypto trading pairs, many altcoin exchanges use tether as a proxy for physical Dollars.

However, the currency may have had another shady goal; large amounts of Tether were also used buy Bitcoin, which propped up its value, the researchers claim.

A paper released Wednesday by a professor at the University of Texas titled "Is Bitcoin Really Un-Tethered?" claims that fraudulent transactions of Tether, a digital currency pegged to the United States dollars, were responsible for approximately 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies. More than $2.2 billion (£1.6 billion) of tether was issued between March 2017 and January 2018, according to the paper. These purchases alone accounted for 50 percent of the cryptocurrency's compounded gains, when its value skyrocketed from $1,200 to around $10,000. The currency is plunged as a stable alternative to Bitcoin's levity, acting as a harbor for crypto investors.

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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".

The authors of the new 66-page paper do not have emails or documents that prove that Bitfinex knew about or was responsible for price manipulation.

Bitcoin reached its peak price of nearly $20,000 in December but is now trading at around $6,300 according to the Coin Market Cap. Their paper seems to confirm what many have believed for months, if not years, that cryptocurrency markets are susceptible to manipulation. They found that half of the increase in Bitcoin's price in 2017 could be traced to the hours immediately after Tether flowed to a handful of other exchanges, generally when the price was declining.

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