Research: A giant whale suspected to be the behind-the-scenes pusher of the 2017 bitcoin bull market

According to Cointelegraph on November 4th, two researchers have now upgraded their claims that the bitcoin market is heavily manipulated, claiming that the price of bitcoin soared in the winter of 2017 and reached a historic high was controlled by a giant whale. .


Image source: pixabay

The two researchers were named John M. Griffin and Amin Shams, both from the University of Texas and Ohio University. Earlier, they reported that the improper manipulation in the market was considered to be the behind-the-scenes of the bitcoin bull market in 2017 and reached a high of $20,000 in December. They have now updated their previous research.

A keen market sense of smell or manipulation?

Griffin and Griffin's analysis was first published in a research paper in June 2018, and they argued that the trading model on the blockchain suggests that Tether is used to provide price support and manipulate the bitcoin market:

“It’s time to buy with Tether after the market downturn, which will lead to a sharp rise in bitcoin’s price. This liquidity is caused by an entity that exists at a large number of pending orders below the integer price, resulting in a bit of asymmetry Asymmetric autocorrelation and indicates that Tether is under-reserved before the end of each month."

Instead of pointing out the needs of cash investors, they argue that these models are consistent with "supply-based assumptions, that is, unsecured digital currencies push up cryptocurrency prices."

The two scholars updated the previous research and re-emphasized their arguments. This argument will be officially published in the forthcoming Journal of Finance peer-reviewed paper.

They believe that the analysis of Tether and Bitcoin transactions between March 1, 2017 and March 31, 2018 demonstrates their view: a single entity trades through Bitwellx, the sister company of Tether, to manipulate the bitcoin . They wrote:

"This model appears every time Tether issues additional USDTs, driven by a large account holder, and no other exchanges are observed.

The two scholars continue to write:

“The simulations show that these models are highly unlikely to be accidental. This big player or entity either shows a keen market timing or exerts a huge price impact on Bitcoin, which affects the funds of other small traders. It is not observed in the total amount of flow."

Bitfinex denies accusations

Tether's general counsel, Stuart Hoegner, categorically denied the two scholars' statements, saying that their research was "defective" and simply untenable, and the data cited were inadequate. .

He further claimed that the purpose of the study was to support an "unnecessary lawsuit" against Tether, Bitfinex and the latter's operator IFinex.