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Researchers Find That One Person Likely Drove Bitcoin From $150 to $1,000 (techcrunch.com)
An anonymous reader shares a report: Researchers Neil Gandal, JT Hamrick, Tyler Moore, and Tali Oberman have written a fascinating paper on Bitcoin price manipulation. Entitled "Price Manipulation in the Bitcoin Ecosystem" and appearing in the recent issue of the Journal of Monetary Economics the paper describes to what degree the Bitcoin ecosystem is controlled by bad actors. To many it's been obvious that the Bitcoin markets are, at the very least, being manipulated by one or two big players. "This paper identifies and analyzes the impact of suspicious trading activity on the Mt. Gox Bitcoin currency exchange, in which approximately 600,000 bitcoins (BTC) valued at $188 million were fraudulently acquired," the researchers wrote.
"During both periods, the USD-BTC exchange rate rose by an average of four percent on days when suspicious trades took place, compared to a slight decline on days without suspicious activity. Based on rigorous analysis with extensive robustness checks, the paper demonstrates that the suspicious trading activity likely caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months." The team found that many instances of price manipulation happened simply because the market was very thin for various cryptocurrencies including early Bitcoin.
"During both periods, the USD-BTC exchange rate rose by an average of four percent on days when suspicious trades took place, compared to a slight decline on days without suspicious activity. Based on rigorous analysis with extensive robustness checks, the paper demonstrates that the suspicious trading activity likely caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months." The team found that many instances of price manipulation happened simply because the market was very thin for various cryptocurrencies including early Bitcoin.
The daily volume is considerably more than you cite, at $600 million/day and that is just in USD terms. Overall volume is about triple that.
I actually agree with you about it being vulnerable, but we should base our arguments on solid numbers.
Because they're different people. The ones flocking to bitcoin (besides the speculators who have no personal values, and the drug addicts) are the libertarians who object the government regulations and taxation and laws that limit the 1% to a mere 50% of the world's wealth.
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don't believe that's the case in 2017. the market is completely different in 2017 vs 2013
Completely different in that yes there is wider distribution now than back 2k13. To say the market is completely different is a bit of streach. This page has some tables with data from September '17. You can clearly see that top 1-2% people have about half the BTC market.
https://medium.com/@BambouClub...
Oddly that is pretty close to the distribution of wealth in general across the world. Maybe this is simply a feature of some other driver in modern finance....Another topic.
At any rate it cannot be said that BTC isn't thinly traded and their are not a handful of people with large enough holdings to manipulate the market. This isn't a BTC specific problem, Soros did it with the Pound in the 90s but... its clearly not a problem BTC has solved either.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html