The University of Texas’s Tether study is a lot like watching The Force Awakens

The University of Texas’s Tether study is a lot like watching The Force Awakens

Crypto Inferno

The words are new and but you somehow feel you’ve seen this before, and the ‘revelations’ fail to shock anyone.

A new study has been published by a group of academics, claiming that bitcoin’s price was manipulated by Tether in the run-up of last year. ‘While it is difficult to pin price drops on any specific event, experts and analysts have suggested the most recent fall in value can be attributed to a new study which suggests market manipulation was behind the 2017 bubble. Researchers at the University of Texas investigated the Bitfinex exchange and a virtual currency called Tether that was created by the Bitfinex owners.’

So writes the so-called Independent: https://www.independent.co.uk/life-style/gadgets-and-tech/news/why-bitcoin-crash-cryptocurrency-price-spike-study-market-manipulation-tether-a8397051.html 

You can read ‘Is Bitcoin Really Un-Tethered’ here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3195066. The abstract states, ‘Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies. The flow clusters below round prices, induces asymmetric autocorrelations in Bitcoin, and suggests incomplete Tether backing before month-ends. 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.’

Is this new? Not even slightly. It’s arguably even more derivative than the latest in the Star Wars franchise. Way back in January an anonymous researcher carried out a detailed analysis and found much the same results. You can read his report at https://www.tetherreport.com/

So this is a total non-story. Or, to be more accurate, the real story here is the timing. Why publish this now, months after the fact, when it was already widely known and had already been widely reported on, albeit in the crypto rather than mainstream media?

Conspiracy theorists would point to collusion between big media and financial organisations, or between the owners of the publication and wealthy individuals – the idea being that one last push of FUD would provide the best buying opportunity.

Or it might just be that academics are slow and mainstream media will publish anything bad they can find about crypto right now.

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