Bitcoin Price Manipulation – What’s the Real Story
- Bitcoin price manipulation rumors have been circulating since late 2017
- Increasing numbers of independent investigators allege that Bitcoin exchange Bitfinex and cryptocurrency Tether, colluded in 2017 to artificially manipulate Bitcoin market prices
- While claims seem to be supported by evidence, claims that the Bitcoin price could pullback as a result are false. Instead, the integrity of Tether and Bitfinex should called into question
A Texas professor of Finance and Ph.D candidate, have recently released a study claiming to prove that Bitcoin price manipulation was endemic throughout 2017.
The Bitcoin Price Manipulation Argument is Starting to Get Heated
To say that the subject of Bitcoin price manipulation is a divisive one is an understatement.
Bitcoin investors can present several factually incorrect news reports and examples of bias. Specifically, examples which demonstrate a (seemingly) concerted effort by the mainstream media to undermine cryptocurrency, dating all the way back to 2009.
Sadly, while there is a strong case for media bias to be made, increasing evidence also suggests that Bitcoin prices over 2017, may have been manipulated by leading Bitcoin exchange, Bitfinex.
How is Bitcoin Price Manipulation Even Possible?
According to researches like Professor of Finance John Griffin and Ph.D. candidate Amin Shams, how Bitcoin exchange prices were manipulated in 2017, is simple.
- Jan Ludovicus van der Velde, is a Dutch national currently based in Hong Kong
- While secretive, Jan Ludovicus is the current CEO of Bitcoin Exchange Bitfinex and USD backed cryptocurrency Tether
- Tether claims to make it easy to invest in cryptocurrency, thanks to the fact that Tether tokens are pegged to the exact value of the US dollar
- Bitcoin price manipulation claims stem from the fact that Tether seems to have been created willfully (and not in a way backed by the dollar) before being used by Bitfinex to purchase vast amounts of Bitcoin
As a result of Bitfinex (allegedly) creating Tether at will and buying Bitcoin from itself, Bitcoin prices are argued to have been unfairly leveraged throughout 2017. There is just one problem.
The Bitcoin Price Manipulation Argument Isn’t Really About Bitcoin
At present, Jan Ludovicus van der Velde has refused to comply with subpoenas and U.S. auditors. Many, therefore, suspect that if Tether and Bitfinex are ever audited, proofs of price manipulation will become evident very quickly. Sadly, though, there is also a case to be made that the Tether / Bitcoin price manipulation story, is itself an effort to curb enthusiasm for Bitcoin.
- The same Bitcoin price manipulation story has been presented as new by several media outlets since December 2017
- Narratives often attempt to lay blame with Bitcoin
- In reality, it should be Tether prices and Bitfinex revenue which pulls back each time this story runs. Rarely, (if ever) though, does this happen
What do Cryptocurrency Investors Need to Know?
For Bitcoin investors, it is worth noting that whenever the Tether/Bitfinex scandal makes a resurgence, the Bitcoin price does drop incrementally. Rather, though, than worry about Bitcoin, investors would be wise instead, to relinquish themselves of any Tether prior to the currency possibly going the same way as Bitconnect. Meanwhile, investors who use Bitfinex to buy and trade assets may want to reconsider and move any on-site funds to a more reputable Bitcoin exchange.