cryptocurrency

Bitcoin price plunges to miserable new low as academics say price manipulation caused 2017 boom


The world’s most famous cryptocurrency exploded in value last year – but was it all the result of malign meddling?

The price of Bitcoin has slumped to a low that hasn’t been seen since before the boom times of late 2017.

One Bitcoin is now worth a depressing $6,370 following claims that last year’s price explosion was caused by artificial market manipulation.

In a paper published today, John M. Griffin and Amin Shams from the University of Texas used algorithms to analyse blockchain data and found that trades of a cryptocurrency pegged to the US Dollar were ‘timed following market downturns’ and resulted in ‘sizable increases in Bitcoin prices’.

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This manipulation was ‘associated with 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies’, they said.

We have decided not to name the rival cryptocurrency named in the study.

This graph shows the plunging price of Bitcoin over the past month (Graphic: Coindesk)

The price slump also comes after the South Korean virtual currency exchange Coinrail said hackers stole more than $37 million, or almost a third of the virtual currency it had stored.

After Coinrail announced the theft, the price of bitcoin dropped $500 in an hour and has continued to slide.

There was more pain for Bitcoin investors after a Wall Street Journal report said US regulators have asked virtual currency exchanges to provide trading data to aid an investigation into virtual currency manipulation.

The reports raised concerns about the future of virtual currency markets.

David Jones, Capital.com’s chief market strategist, says Bitcoin is ‘a classic case of an economic bubble’.

Last year, the virtual currency increased sixfold and hit a record high of $19,783 in December.

MORE: Bitcoin price could hit ‘near-zero’, co-founder of rival cryptocurrency Ethereum warns





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