Bitcoin's Price Was Artificially Inflated Last Year, Researchers Say (nytimes.com)

A concentrated campaign of price manipulation may have accounted for at least half of the increase in the price of Bitcoin and other big cryptocurrencies last year, according to a paper released on Wednesday by an academic with a history of spotting fraud in financial markets. From a report, first shared to us by reader davidwr: The paper by John Griffin, a finance professor at the University of Texas, and Amin Shams, a graduate student, is likely to stoke a debate about how much of Bitcoin's skyrocketing gain last year was caused by the covert actions of a few big players, rather than real demand from investors. Many industry players expressed concern at the time that the prices were being pushed up at least partly by activity at Bitfinex, one of the largest and least regulated exchanges in the industry. The exchange, which is registered in the Caribbean with offices in Asia, was subpoenaed by American regulators shortly after articles about the concerns appeared in The New York Times and other publications. Mr. Griffin looked at the flow of digital tokens going in and out of Bitfinex and identified several distinct patterns that suggest that someone or some people at the exchange successfully worked to push up prices when they sagged at other exchanges. To do that, the person or people used a secondary virtual currency, known as Tether, which was created and sold by the owners of Bitfinex, to buy up those other cryptocurrencies.

Comments

It was Willybot

[xack]

The big MtGox bubble in 2013 was caused by Willybot. Other bots have been developed since then to pump the price. I seen the price of Bitcoin rise over a 1000 dollars in a minute at the peak of the bubble due to bot activity.

It has no intrinsic value

[Theaetetus]

So the price is always artificially inflated.

Re:It has no intrinsic value

[DontBeAMoran]

Beethoven's Piano Concerto #5 is priceless.
Bitcoin's value is price-less.
Ergo, Beethoven invented Bitcoin.

It actually does

[rsilvergun]

it has the value of the drugs it's being used to buy and money laundering done with it. That's what formed the base of the Crypto currency market (with a smattering of ransomware and video game 'skin' gambling). A serious of transactions that needed to be kept off the books. It was only later Crypto currencies branched out into unregulated and unbacked securities (e.g. the "Proof of Stake" coins that have become so popular).

If you want to see Bitcoin's price _really_ tank legalize drugs, crack down on money laundering and kill the securities scams. It'll go back to a few bucks a coin while the rest of the currencies will be worthless.

Re:No value at all

[ljw1004]

To find something with real value we need to go back to beans, firewood, pork, tools, etc. These sorts of things have real value.

Thanks for your 2c^H^H^H half a bean