Bitcoin may be manipulated, researcher says

Bitcoin may be manipulated, researcher says

John Griffin, a professor of finance at the University of Texas, spoke again about manipulating Bitcoin’s price. In conversation with Fortune, the professor points out that despite so much negative news, bitcoin is on the rise.

The first time, in 2018, Griffin published a study claiming that a single person drove up the price of Bitcoin. Moving on, it also noted that the stablecoin Tether (USDT) was used in this scam.

“Issue of unsupported Tether increased the amount of coins chasing the same Bitcoin supply”Griffin told Fortune in an article published this Thursday (2). “Tether, created from scratch, drove up the price of Bitcoin and other cryptocurrencies.”

Now the teacher thinks the same is happening, but notices “there is no concrete analysis this time”.

“It is very suspicious. The same mechanism we saw in 2017 could now be at play in the still unrealistic Bitcoin market.

Professor believes Bitcoin price is being manipulated again

According to John Griffin, one of the reasons that makes a more detailed analysis difficult, as in his previous study, is the growth of the industry and more sophisticated techniques by the alleged manipulators.

“The space is bigger now, so it’s harder to dig up the data. Advanced players can be experts at hiding their identities.”

In any case, Tether, the main accused by Griffin in previous years, is still the cryptocurrency with the highest daily trading volume, even though its market value is almost 7 times smaller than Bitcoin.

“Bitcoin and Tether are not used to buy things like cars and pizza, they are used to buy other currencies. Therefore, in this closed system, a relatively small amount of manipulated purchases, spurred by the creation of new coins from scratch, can , causing the price of Bitcoin to skyrocket.Griffin told Fortune.

Bitcoin withstood the strong fall of FTX

Another point highlighted by Fortune was Bitcoin’s great strength in weathering the bankruptcy of the market’s second-largest cryptocurrency brokerage at the time, FTX. As a highlight, the magazine even recalls Binance’s Changpeng Zhao accusing Sam Bankman-Fried of dropping USDT below $1.

A few months later, Bitcoin rose again as if nothing had happened and closed last month with a 40% increase, the highest in January in the past 9 years, while other giants also went bankrupt.

“That $16,000 could serve as a coordination mechanism, for example”said Professor John Griffin of Bitcoin’s low point in recent months.

SEC also believes that the price of Bitcoin is manipulable

Meanwhile, the US Securities and Exchange Commission (SEC) rejected yet another mock Bitcoin ETF last Thursday (26), citing that BZX (Ark Invest’s proposed ETF) would not protect investors from manipulation.

“The Committee concludes that BZX has not fulfilled its task […] to demonstrate that your proposal complies with the requirements […] that the rules of a national stock exchange are “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest”.

Finally, it’s worth noting that neither John Griffin nor the SEC have provided evidence that Bitcoin’s price is being manipulated. In any case, the allegations are serious and attract the attention of both investors and other regulators.

Source: Live Coins