A Single Whale Caused 2,000% BTC Price Surge in 2017: Study Shows

A Single Whale Caused 2,000% BTC Price Surge in 2017: Study Shows

A Texas academic created a stir previous year by alleging that Bitcoin's astronomical surge in 2017 was probably triggered by manipulation.

According to John Griffin, Professor at the Univerisity of Texas, along with Amin Shams, Assistant Professor at Ohio State University, one single whale's movement on Bitfinex led to the exponential hike in Bitcoin's price.

The researchers' theory is partly based on Tether's stablecoin to actually being backed by USA dollars, which would mean the firm created USDT out of thin air to then buy Bitcoin, which would help the cryptocurrency's price rise. The authors analyzed Bitcoin transactions from March 1, 2017, to March 31, 2018, and concluded that BTC bought on Bitfinex increased whenever the price of Bitcoin fell by significant measures. They claim to have found a pattern "only present in periods following large printing of Tether, driven by a single large account holder".

They say the single largest player on Bitfinex "either exhibited clairvoyant market timing or exerted an extremely large price impact on Bitcoin that is not observed in the aggregate flows from other small traders". Tether, the company behind USDT has also called the research "foundationally flawed" and that it was likely published to support a "parasitic lawsuit".

In his statement, Tether's Hoegner was adamant that the allegations laid out in the paper are a farce and have no solid ground.

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Another startling claim made in the updated research points a finger towards Tether and Bitfinex who have often been accused of pumping Bitcoin price.

This is a transparent attempt to use the semblance of academia for a mercenary money grab.

In an update to their previous research, the academics are intensifying their argument, which is set to be formally published in a forthcoming peer-reviewed paper for the Journal of Finance.

Back again in April, the New York Legal professional General's place of work said that Bitfinex lost access to $850 million held by 3rd-bash payment processor Crypto Capital, and covered up the losses by borrowing from Tether's reserves.

Bitcoin's rise as a form of digital currency was solidified by the cryptocurrency's massive hike in 2017. Bitfinex has said that James' suit is riddled with erroneous assertions.

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