NYT : Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

Is this a note from the No Shit Sherlock Diaries? Now to have a legit discussion:

1. We already suspected/blamed Tether for the raise of BTC, so this is not new news.

2. If Tether is legit, this is expected because when money comes in buying, price goes up. But that if is a really big IF, and there is no accounting for Tether that it is actually backed up by real cash.

So as long as we don't know the true nature of Tether, we are left to guess.

"The exchange, which is registered in the Caribbean..."

If that doesn't instill confidence, I don't know what is... But this is the same old with cryptos:

"A paper published last year by a team of Israeli and American researchers said much of Bitcoin’s big price increase in 2013 was caused by a campaign of price manipulation at what was then the biggest exchange, Mt. Gox."
 
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"Artificially inflated last year?

Could be that everything about cryptos has always been nothing more than "balloon juice".

Time will tell.
 
@truetype, thanks for including the original reference.

A mixed bag, frankly I was expecting better considering the hype. Some of the paper is interesting and consistent with what I heard, like the pushing observations and strong pegging around round numbers. Some other arguments are outright laughable, like the Bitcoin EOM returns conditional on Tether issues (really, what’s the statistical significance there?).

My main gripe with the hypothesis is that the total market cap of tether is less than average daily volume of bitcoin. Than again, concentrated orders might do the trick, it’s very hard to tell other way. A null hypotheses is simple bargain shopping by large market participants when prices are to their liking.

PS. As an aside, watching the two sides cater to their confirmation bias is gonna be wicked fun

PPS. Wait, that’s the same dude that wrote a paper on manipulation of VIX settlements - that paper, honestly, was subpar and the guy totally dodged the questions about the implications of Nash equilibrium in the process at the recent seminar he gave
 
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