Backstory for the Bitcoin rocket
Good morning readers, I wish you all a successful week. Everyone rested well enough? Let's ease into the week with some soft data, taking a look at a recently released research paper.
Namely, John M. Griffin and Amin Shams from the Department of Finance of University of Texas at Austin, released a research paper, looking into the meteoric price rise of Bitcoin last year (2017).
In short:
This paper investigates whether Tether, a digital currency pegged to U.S. dollars, influences Bitcoin and other cryptocurrency prices during the recent boom.
Please don't take it as pure gold, but as the title suggests, the main topic in this paper is Tether. As you know, Bitfinex, the creator of Tether, claims that every USDT (Tether) is backed by 1 USD. Various audits trying to verify this has failed, so much of this is specualtion.
But according to Griffin and Shams, during heavy market downturns, cryptocurrency flows in and out of Bitfinex started showing a pattern. Analyzing a lot of blockchain data, they discovered that a massive amount of Tether was printed and used to prop up cryptocurrency prices and contribute to the hype again. A team of experienced traders cooperating with a professional exchange would have no problem finding the perfect areas to fuel the hype and subsequents rallies.
Bitfinex itself has denied the accusations of price manipulation. NY times quotes a Bitfinex executive:
"Tether issuances cannot be used to prop up the price of Bitcoin or any other coin/token on Bitfinex”
Whether every USDT is covered by real dollars and whether Bitfinex was part of some price manipulation, will probably remain unknown to us for the moment. But one cannot underestimate the participation of the masses. Manipulation of this magnitude would not be possible without all the media hype and participation of get-rich-quickly guys.
img credz: pixabay.com
And now, nearly a year after the start of the meteoric rise, all the revelations weigh heavily on the inflated price. But as we can now relax, take a step back and look objectively at the real valuations, perhaps a new phase will soon start, with cryptocurrencies being valued by their actual worth and contribution to our lives?
As Bitcoin is searching for it's proper valuation, it weighs heavily on all other cryptocurrencies as well, perhaps taking them undeservingly down with itself. Only we, the real cryptocurrency enthusiasts can change that, empowring the technology and usage behind the real utility coins.
heckifiknowcomics.com via reddit.com
Materials:
Still not selling your vote to Minnowbooster to earn SBD? Do it now
Title image from pixabay
Are you looking for Minnowbooster, Buildteam or Steemvoter support? Or are you looking to grow on Steemit or just chat? Check out Minnowbooster Discord Chat via the link below.
buildTeam.io
Good Morning @furious-one, Though cryptocurrency is getting more and more acceptance in different walks of life like we witnessed Viação Garcia and Brasil Sul, two companies of the GSB Group went mainstream with crypto currency. Also, we noticed a Mosque there in UK started accepting donations in crypto. There are several other such examples that you might have come across. Ultimately, it's a very positive scenario for us, the crypto enthusiasts. However, the manipulative role of banks/whales with BTC is very negative. I agree with you on this point:
They control media and all other tools to run the states. The sudden ban on crypto in Asian countries during dip actually helped the whales/banks to buy BTC at a very low price and later on, those who did the panic sell had to rebuy at a high price. The ban is still just on paper.
By the way, what do you think about SBD's future? Can it replace Tether if its price touches its pegged value?
SBD will definitely not replace Tether as it's not pegged and easy to pump. Would they somehow force-peg it and how would that work, at the moment i don't know.
OK let see what happens next. May be the next month proves to be the best in this year for us.
Hopefully the prices of Bitcoin and other cryptocurrencies will go to the moon. There are many factors affecting the prices of bitcoin and other currencies.