The sharp rise of bitcoin price in late 2017 and the subsequent decline were caused by market manipulation - the price was supported artificially, due to the uncontrolled "printing" of another cryptocurrency, Tether. This conclusion was made by Professor of the University of Texas John Griffin and Master Amin Shams, who studied the public records of bitcoin transactions from March 2017 through March 2018.
The creators of the Bitfinex exchange issue their own virtual currency under the name Tether, which is backed up with the money - US dollars. New Tether tokens are issued when investors exchange e-currency at a rate of $ 1 for one "token." As a result, Tether, which is tied to "real" money, has more trust, and it is very often used to buy other virtual coins, including bitcoin.
The analysis carried out by the scientists revealed a connection between the Tether emission and bitcoin - especially in those periods when the coin rate was heavily sagging. When the bitcoin price went down, Bitfinex "printed" the new Tether tokens, which helped artificially stimulate demand. The cost of other cryptocurrencies, such as Ethereum and Litecoin, also increased during this period, sometimes up to 64%. Uncontrolled emission of Tether led to a sharp rise in price, and then to the collapse of bitcoin. If in December for one "coin" on some exchanges was given $ 20 thousand, but today (CoinDesk data at 12:00 UTC) - $ 6.4 thousand.
The price of bitcoin was artificially inflated before, writes The New York Times. For example, during the period of work of the once largest exchanger Mt. Gox in 2013, the cryptocurrency for two months has risen from $ 150 to $ 1000.
Posted from my blog with SteemPress : https://coinatory.com/2018/06/15/the-price-of-bitcoin-in-2017-was-pumped-intentionally/