A single market whale on cryptocurrency exchange Bitfinex likely manipulated bitcoin’s historic surge of over 2,000% in 2017, according to two U.S. academics.
John Griffin, a professor at the University of Texas and Amin Shams, an assistant professor at Ohio State University, have jointly updated a paper they first published in 2018, saying that one entity on Bitfinex moved the bitcoin’s prices in 2017. Griffin and Shams did not name the entity.
The updated, peer-reviewed paper, shared with Bloomberg and set to be published in a forthcoming Journal of Finance, examined stablecoin tether (USDT) and bitcoin (BTC) transactions from March 1, 2017 to March 31, 2018, concluding that BTC purchases on Bitfinex increased whenever bitcoin’s value fell by certain increments.
“Our results suggest instead of thousands of investors moving the price of Bitcoin, it’s just one large one,” Griffin told Bloomberg, adding: “Years from now, people will be surprised to learn investors handed over billions to people they didn’t know and who faced little oversight.”
In their first paper, Griffin and Shams said that tether was “used both to stabilize and manipulate” bitcoin prices in 2017. At the time also, Bitfinex rejected the claims, with its CEO JL van der Velde saying: “Bitfinex nor Tether is, or has ever, engaged in any sort of market or price manipulation.”