One Whale Was Behind Bitcoin’s 2017 Bull Run, Claim Researchers

Daniel Fowler
November 7, 2019

Finance professor John M. Griffin from the University of Texas and assistant professor of finance at the Ohio State University - Amin Shams, came up with a paper in 2018 that the price actions may have been manipulated.

Our results suggest that instead of thousands of investors moving the price of Bitcoin, it's just one large one. "Years from now, people will be astonished to find out investors handed above billions to men and women they didn't know and who confronted tiny oversight".

Further, in a new peer-reviewed paper attached to a forthcoming Journal of Finance, the academics alleged that the buying pattern followed periods of Tether printing "driven by a single large account holder, and not observed by other exchanges".

"Simulations present that these patterns are hugely unlikely to be thanks to possibility. This one large player or entity either exhibited clairvoyant market timing or exerted an extremely large price impact on Bitcoin that is not observed in aggregate flows from other smaller traders", it adds.

Tether's general counsel Stuart Hoegner, however, refuted that all the claims, calling the research "foundationally flawed". The analysis was probably released to back again a "parasitic lawsuit", Hoegner extra in his assertion.

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Bitfinex and Tether have the same parent company, the largest derivative exchange used its Tether reserves to manipulate its yearly losses of over $850 million.

He went on to claim that the paper lacks "academic rigor" and was an "attempt to use the semblance of academia for a mercenary money grab".

Bitcoin's rise as a form of digital currency was solidified by the cryptocurrency's massive hike in 2017.

The report, out on October 28, was an update from a study the duo released in June 2018, which found tether was "used both to stabilize and manipulate" bitcoin's price in 2017. Neither the CFTC nor federal USA prosecutors have accused Bitfinex or Tether of any wrongdoing. And the NY attorney general has sued Tether and Bitfinex, accusing them of participating in a cover-up after losing $850 million worth of customer and corporate funds. This was their finding in a paper published in 2018, a paper that has since been updated. Polish media, including Radio RMF, said the suspect is Ivan Manuel Molina Lee, Crypto Capital's president.

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