Skip to Content
Blockchain

One Bitcoin “whale” may have fueled the currency’s price spike in 2017

November 4, 2019
bitcoin value
Andre Francois McKenzie via Unsplash

A single Bitcoin holder—called a “whale” in cryptocurrency parlance—likely manipulated the market and helped fuel the big rise in Bitcoin’s price in 2017, according to researchers. That year, Bitcoin’s price jumped from under $1,000 in January to more than $19,000 in December.

The news: Last year, University of Texas professor John Griffin and Amin Shams, an instructor at Ohio State University, published controversial research concluding that in 2017 just a few big players used the stablecoin Tether to prop up the price of Bitcoin following market downturns. Griffin and Shams now tell Bloomberg that just a single whale was likely behind the behavior. They say that one entity on Bitfinex, a popular cryptocurrency headquartered in Hong Kong, appears able to push the price of Bitcoin up when it falls below certain thresholds. 

The research: Griffin and Shams studied Bitcoin and Tether transactions from March 1, 2017, to March 31, 2018. They found that Bitcoin purchases on Bitfinex increased whenever the price dropped by certain increments. According to Bloomberg, which saw a prepublication version of a paper set to be published in the Journal of Finance, the authors conclude: “This pattern is only present in periods following the printing of Tether, driven by a single large account holder, and not observed by other exchanges."

Tether’s general counsel Stuart Hoegner told Bloomberg that the research is “foundationally flawed” because it relies on insufficient data.

Crypto-controversy: The same executives who own Bitfinex also control Tether, which is no stranger to controversy. 

In 2017, the two firms received subpoenas from the US Commodity Futures Trading Commission. In May of 2018, the US Justice Department opened a criminal investigation into whether Tether was indeed being used to manipulate Bitcoin. And the New York attorney general has sued Tether and Bitfinex, accusing them of participating in a cover-up after losing $850 million worth of customer and corporate funds. 

Keep up with the fast-moving and sometimes baffling world of cryptocurrencies and blockchains with our weekly newsletter Chain Letter. Subscribe here. It’s free!

Keep Reading

Most Popular

A Roomba recorded a woman on the toilet. How did screenshots end up on Facebook?

Robot vacuum companies say your images are safe, but a sprawling global supply chain for data from our devices creates risk.

A startup says it’s begun releasing particles into the atmosphere, in an effort to tweak the climate

Make Sunsets is already attempting to earn revenue for geoengineering, a move likely to provoke widespread criticism.

10 Breakthrough Technologies 2023

Every year, we pick the 10 technologies that matter the most right now. We look for advances that will have a big impact on our lives and break down why they matter.

These exclusive satellite images show that Saudi Arabia’s sci-fi megacity is well underway

Weirdly, any recent work on The Line doesn’t show up on Google Maps. But we got the images anyway.

Stay connected

Illustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at customer-service@technologyreview.com with a list of newsletters you’d like to receive.