{"id":60600,"date":"2018-06-14T07:00:00","date_gmt":"2018-06-14T14:00:00","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=60600"},"modified":"2019-11-07T02:55:57","modified_gmt":"2019-11-07T02:55:57","slug":"bitcoin-price-manipulation-study-suggests-2-5-billion-tether-used-to-create-artificial-btc-demand","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/bitcoin-price-manipulation-study-suggests-2-5-billion-tether-used-to-create-artificial-btc-demand\/","title":{"rendered":"Bitcoin Price Manipulation: Study Suggests $2.5 Billion Tether Used to Create Artificial BTC Demand"},"content":{"rendered":"<p>A new investigation conducted by University of Texas researchers reveals compelling evidence that the meteoric rise of <a href=\"http:\/\/cryptoslate.com\/coins\/bitcoin\">Bitcoin<\/a> and other cryptocurrencies in late 2017 is linked to price manipulation executed by individuals using <a href=\"http:\/\/cryptoslate.com\/coins\/tether\">Tether<\/a> to create artificial market demand.<\/p>\n<p>The study, entitled \u201c<a href=\"https:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=3195066\">Is Bitcoin Really Un-Tethered?<\/a>,\u201d was composed by University of Texas professor of Finance <a href=\"http:\/\/www.jgriffin.info\/\">John Griffin <\/a>and Ph.D. candidate Amin Shams, and uses algorithms to analyze blockchain data related to price spikes. Griffin, who has performed a range of forensic financial study, highlights a number of market patterns that indicate Tether was used to inflate demand for Bitcoin at critical points.<\/p>\n<h2>Tether Used to Increase Bitcoin Price<\/h2>\n<p>John Griffin and co-author Amin Shams correlate the timing of <a href=\"https:\/\/cryptoslate.com\/tether-printing\/\">Tether transactions and Bitcoin price movements<\/a> in the paper, identifying patterns that demonstrate less than 1% of hours in which large-scale Tether purchases occur are associated with 50% of the market movements that resulted in the rapid rise in value of Bitcoin, and 64% of the positive action expressed by other cryptocurrencies.<\/p>\n<p>The \u00a0patterns expressed within the data examined by Griffin, states the professor, is indicative of market manipulation:<\/p>\n<blockquote><p>\u201cThese patterns cannot be explained by investor demand proxies but are most consistent with the supply-based hypothesis where Tether is used to provide price support and manipulate cryptocurrency prices.\u201d<\/p><\/blockquote>\n<figure id=\"attachment_38456\" aria-describedby=\"caption-attachment-38456\" style=\"width: 300px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-38456\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/03\/tether-printing-social-300x158.jpg\" alt=\"Tether Prints An Additional $300 Million In Tokens\" width=\"300\" height=\"158\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/03\/tether-printing-social-300x158.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/03\/tether-printing-social-768x403.jpg 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/03\/tether-printing-social-1024x538.jpg 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/03\/tether-printing-social.jpg 1200w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-38456\" class=\"wp-caption-text\">Related:\u00a0<a title=\"Tether Prints An Additional $300 Million In Tokens\" href=\"https:\/\/cryptoslate.com\/tether-printing\/\">Tether Prints An Additional $300 Million In Tokens<\/a><\/figcaption><\/figure>\n<p>The study found that as more Tether is printed and enters the market, cryptocurrency prices rise accordingly \u2014 in a manner \u00a0\u201csimilar to the inflationary effect of printing additional money.\u201d<\/p>\n<p>Tether has recently come under fire from the cryptocurrency community for <a href=\"https:\/\/cryptoslate.com\/tether-printing\/\">failing to execute<\/a> an audit while continuing to print tokens in spite of a <a href=\"https:\/\/cryptoslate.com\/crypto-markets-drop-regulators-subpoena-bitfinex-tether\/\">CTFC subpoena<\/a> regarding Tether reserves.<\/p>\n<h2>Bitfinex and Tether Associated With Manipulation in Report<\/h2>\n<p>The evidence of market manipulation presented within the study implies that after Bitfinex cut Tether supplies, manipulation patterns ended. Bitfinex and Tether both share the same CEO \u2014 Jan Ludovicus van der Velde \u2014 and the Tether projects lists Bitfinex as a primary integrated exchange.<\/p>\n<p>JL van der Velde, however, denied any accusations of manipulation in a <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2018-06-13\/professor-who-rang-vix-alarm-says-tether-used-to-boost-bitcoin\">statement<\/a> provided to Bloomberg:<\/p>\n<blockquote><p>\u201cBitfinex nor Tether is, or has ever, engaged in any sort of market or price manipulation. Tether issuances cannot be used to prop up the price of Bitcoin or any other coin\/token on Bitfinex.\u201d<\/p><\/blockquote>\n<p>While the Bitfinex CEO claims that Tether cannot be used to prop up Bitcoin prices, the evidence presented by Griffin in the study states otherwise. Griffin, speaking with Bloomberg, stated that there\u00a0is strong evidence of Tether being used to \u201cprotect Bitcoin prices during downturns\u201d in a coordinated manner:<\/p>\n<blockquote><p>\u201cI\u2019ve looked at a lot of markets. If there\u2019s fraud or manipulation in a market it can leave tracks in the data. The tracks in the data here are very consistent with a manipulation hypothesis.\u201d<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>A new investigation conducted by University of Texas researchers reveals compelling evidence that the meteoric rise of Bitcoin and other cryptocurrencies in late 2017 is linked to price manipulation executed by individuals using Tether to create artificial market demand. The study, entitled \u201cIs Bitcoin Really Un-Tethered?,\u201d was composed by University of Texas professor of Finance [&hellip;]<\/p>\n","protected":false},"author":25,"featured_media":60746,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[120,39,32631],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bitcoin Price Manipulation: Study Suggests $2.5 Billion Tether Used to Create Artificial BTC Demand<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/bitcoin-price-manipulation-study-suggests-2-5-billion-tether-used-to-create-artificial-btc-demand\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bitcoin Price Manipulation: Study Suggests $2.5 Billion Tether Used to Create Artificial BTC Demand\" \/>\n<meta property=\"og:description\" content=\"A new investigation conducted by University of Texas researchers reveals compelling evidence that the meteoric rise of Bitcoin and other cryptocurrencies in late 2017 is linked to price manipulation executed by individuals using Tether to create artificial market demand. The study, entitled \u201cIs Bitcoin Really Un-Tethered?,\u201d was composed by University of Texas professor of Finance [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/bitcoin-price-manipulation-study-suggests-2-5-billion-tether-used-to-create-artificial-btc-demand\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2018-06-14T14:00:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-11-07T02:55:57+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/06\/bitcoin-tether-social.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Sam Town\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Bitcoin Price Manipulation: Study Suggests $2.5 Billion Tether Used to Create Artificial BTC Demand\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/06\/bitcoin-tether-social.jpg\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Sam Town\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/bitcoin-price-manipulation-study-suggests-2-5-billion-tether-used-to-create-artificial-btc-demand\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/bitcoin-price-manipulation-study-suggests-2-5-billion-tether-used-to-create-artificial-btc-demand\/\"},\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/sam-town\/#person\",\"name\":\"Sam Town\",\"url\":\"https:\/\/cryptoslate.com\/author\/sam-town\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/sam-town\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/sam-town\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/03\/author-sam-town.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/03\/author-sam-town.jpg\",\"caption\":\"Sam Town\"},\"description\":\"Samuel is a freelance journalist, digital nomad, and crypto enthusiast based out of Bangkok, Thailand. 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