BITCOIN’s rise back above $7,500 for the first time in a month has been met with suspicion from American economist Nouriel Roubini who claims that “price manipulation” triggered the 10 percent price spike in just 30 minutes.
Bitcoin is flying having jumped 10 percent over the last day to hit a high of $7,523 in the early hours this morning.
Other coins have joined the party with ethereum climbing to $504 and ripple up at $0.51. Analysts are excited after BTC climbed the 50-day moving average (MA) on Monday for the first time in nearly two months, and wallet holders are hopeful that the rise will continue on up to $10,000.
However, Nouriel Roubini, nicknamed Dr Doom for his tireless efforts to warn the world over the housing bubble crash of 2007-2008, is less than convinced pointing to the controversial stable coin - Tether - and allegations that it is used to manipulate bitcoin prices.
Professor Roubini said: “Bitcoin literally spiking up by almost 10 percent in about 30 minutes today based on no news.
“So only explanation: price manipulation. Since Tether recently printed another $200 million of fake money & since research proves Tether used to manipulate BTC, manipulation is at work again.”
The accusation that bitcoin’s sudden price spikes are manipulated by Tether comes from a report published by University of Texas claiming to have found proof that bitcoin's price was manipulated during market downturns.
Professors John Griffin and Amin Shams of the University of Texas Department of Finance published a paper that provides the most compelling opinion yet of the alleged link between a controversial ‘stablecoin’ called Tether and the staggering price rises at the tail end of 2017.
Tether is controversial because its price is “tethered” to the Dollar - $1 buys one Tether token.
The fear remains that the new Tether coins were created and then used on various exchanges to make big purchases of bitcoin and other tokens. The new tokens - created, and not bought using US dollars - were used to push prices back up and reassure wallet holders that the blip was temporary.
@Twitter/ Roubini
The study supports this hypothesis and claims to have produced a clear link between the printing of new Tether tokens and bitcoin's overheated price increases.
The study said: “By mapping the blockchains of bitcoin and Tether, we are able to establish that entities associated with the Bitfinex exchange use tether to purchase bitcoin when prices are falling.
“Such price supporting activities are successful, as bitcoin prices rise following the periods of intervention. These effects are present only after negative returns and periods following the printing of Tether."
However, the recent rise in crypto prices is also being credited to yesterday's report from the Financial Stability Board (FSB), plotting the path for G20 countries to regulate cryptocurrencies and bring them closer towards mainstream global finance.
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Prices rose after the FSB delivered a framework for the world's leading G20 countries to “monitor the financial stability implications of crypto-assets markets.”
CEO of deVere Group, Nigel Green told Express.co.uk: “The FSB's conclusion follows more and more global financial institutions, major corporations and household name investors now working with cryptocurrencies and blockchain, the technology that underpins them, and as international regulation is developed further.
“Cryptocurrencies are the future of money and they are already undeniably part of mainstream finance."
In June Express.co.uk contacted Bitfinex for comment on the allegation and for further explanation over various tether transactions on the exchange during 2017.
Bitfinex CEO JL van der Velde has rejected the allegations in the University of Texas paper, and a spokesman from the company told Express.co.uk: “Bitfinex nor tether is, or has ever, engaged in any sort of market or price manipulation. Tether issuances cannot be used to prop up the price of bitcoin or any other coin/token on Bitfinex.”
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