Crypto-currency Tether has been used to manipulate the price of Bitcoin
The crypto-currency Tether has been used to manipulate the price of Bitcoin, according the professor of finance in University of Texas, John Griffin. The study shows how Tether has been exchanged for Bitcoin at important moments by helping to raise the price of the most popular crypto-currency to record prices in December.
"Tether is also used to stabilize and manipulate bitcoin prices", said John Griffin.
The purpose of the study was to understand how 2.5 billion tether tokens in circulation were moving in the markets. There is not much information around the crypto-currency, and it is usually traded at around 1 USD, as its creators claim there is one dollar in a bank behind each token. It was created in 2015 and was advertised as a more robust alternative to bitcoin. The data analyzed by Professor John Griffin followed the Bitcoin rally to nearly 20,000 USD before collapse to about 6,500 USD this week.
First, the Tether was often offered in large "portions" of 200 million tokens. Nearly all new tokens have been moved to the Bit Nex exchange. Once the price of bitcoin fell the Tether was used for the purchases "in a coordinated manner that is moving the price".
"I looked at many markets. If there is fraud or manipulation in a market, it leaves traces. And the traces I found are consistent with the hypothesis of manipulation", said Professor Griffin.
The study shows that at times when bitcoin went down, Tether was used to buy crypto-currency to stabilize the price. In opposite cases - when bitcoin grows, there was no noticeable withdrawal.
The focus was on 87 of the largest Bitcoin-Tether purchases from March 2017 to March 2018. The new Tether tokens were issued within three days and the bitcoin price dropped within an hour before purchase. Upon trading, Bitcoin has increased its price.
Although these 87 examples are less than 1% of all made for the period, thanks to them, 50% of the bitcoin growth has accumulated. Within 10,000 simulations, Professor Griffin shows that "this can never happen by accident".
"The madness about Bitcoin is not just about 20-year-olds who buy crypto-currencies - that's just a part - but there are huge players who move the market and have a significant impact on the price", concluded the professor of finance in University of Texas.
Posted from my blog with SteemPress : http://financeandmarkets.com/crypto-currency-tether-used-manipulate-price-bitcoin/
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