A single large player manipulated the price of bitcoin as it ran up to a peak of nearly $20,000 two years ago, a new study concludes. According to a report, the University of Texas professor John Griffin and Ohio State University’s Amin Shams updated a paper they released back in 2018 in which they explained the largest stablecoin Tether (USDT) was used to manipulate Bitcoin’s price.
“Our results suggest instead of thousands of investors moving the price of Bitcoin, it’s just one large one. Years from now, people will be surprised to learn investors handed over billions to people they didn’t know and who faced little oversight.” - Griffin said in an interview.
The document examines the transactions made with stablecoin Tether (USDT) and bitcoin between March 1, 2017, and March 31, 2018. According to this, there were major purchases on the Bitfinex trading platform right when bitcoin price fell. The authors of a study believe bitcoin's price grew as a result of the actions of a single whale. However, the exchange has refuted these claims. In fact, Stuart Hoegner, the platform's lawyer, says the document has "fundamental flaws" because it is based on insufficient information and lacks "academic rigor."
This is not the first time that Tether is involved in controversies regarding its involvement in the cryptocurrency market. New York Attorney General Letitia James said in a lawsuit that Tether and Bitfinex participated in a cover-up of $850 million in funds that were used to back USDT tokens released to the market.