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Two researchers who made waves last year for publishing a paper alleging Tether (USDT) was likely used to manipulate the bitcoin price in 2017 are extending that work with a revised paper in which they argue a single whale, or a holder with a massive amount of cryptocurrency, seems to have been the source of that manipulation.

The new paper, which has already been contested by more than a few cryptocurrency analysts, is being released in a coming issue of the Journal of Finance, a leading academic finance research publication.

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Written by University of Texas Professor John Griffin and Ohio State Assistant Professor Amin Shams, the paper outlines their case that tether-driven transactions from a single whale on Bitfinex were conspicuously timed to buy bitcoin whenever the bitcoin price fell past particular points.

The peer-reviewed paper, shown to Bloomberg before its impending publication, examined the period between March 2017 and March 2018, during which bitcoin set the globe abuzz with a series of acute price runs that led the cryptocurrency to its latest peak of $20,000 USD per coin. The researchers argue that USDT that wasn’t fully backed by dollars played a role in those runs.

In an early sample from the work, the academics relatedly said:

“This pattern is only present in periods following printing of Tether, driven by a single large account holder, and not observed by other exchanges. Simulations show that these patterns are highly unlikely to be due to chance. This one large player or entity either exhibited clairvoyant market timing or exerted an extremely large price impact on Bitcoin that is not observed in aggregate flows from other smaller traders.”

As such, the argument doesn’t abandon but extends the case the researchers made in their original paper.


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“These patterns cannot be explained by investor demand proxies but are most consistent with the supply-based hypothesis where Tether is used to provide price support and manipulate cryptocurrency prices,” the academics wrote last year.

Bitfinex Holds Firm

In their latest research, Griffin and Shams didn’t go so far as to allege what entity was or may have been responsible for the manipulation. But they do maintain manipulation was indeed at work, Griffin has since commented:

“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.”

For its part, Bitfinex argues the new work and the old work are inaccurate. Bitfinex general counsel Stuart Hoegner has since contested the research as having been made in bad faith.

“This is a transparent attempt to use the semblance of academia for a mercenary money grab … Updates or not, the paper lacks academic rigor,” Hoegner commented.

Plenty of Skepticism Ahead of Publication

As news of the expanded paper spread, skepticism and outright cries of “FUD” — fear, uncertainty and doubt — abounded among various analysts and beyond.

For instance, Alex Krüger, who earned accolades in the space last year for pointing out non-trivial discrepancies in Griffin and Shams’s original paper, argued that the researches have a “track record of twisting data to fit their narrative.”

Others, like Circle co-founder and CEO Jeremy Allaire, said the alleged bitcoin manipulation was much more likely the result of an acute explosion of retail investor interest in 2017, a point that eToro analyst Mati Greenspan has also made.

Yet the intrigue is set to continue so long as the new paper remains unpublished.

The researcher’s coming work at least seemed poised to lack its former major discrepancies, according to Larry Cermak, Director of Research at The Block. Yet after having a chance to personally review the paper, Cermak said it still appeared to suffer from the same kinds of pitfalls.


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Posted by William M. Peaster

William M. Peaster is a professional writer and editor who specializes in the Bitcoin, Ethereum, and Dai beats in the cryptoeconomy. Has appeared in Blockonomi, Binance Academy, Bitsonline, and more. Enjoys tracking smart contracts, DAOs, dApps, and the Lightning Network. Learning Solidity.


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