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Bitcoin

Bitcoin's 2023 Price Rise 'Very Suspicious', Says Manipulation Researcher (yahoo.com) 104

In 2017 the New York Times covered research co-authored by John Griffin, a finance professor at the University of Texas, into Hong Kong-based Bitfinex, "one of the largest and least regulated exchanges in the industry." Mr. Griffin looked at the flow of digital tokens going in and out of Bitfinex and identified several distinct patterns that suggest that someone or some people at the exchange successfully worked to push up prices when they sagged at other exchanges. To do that, the person or people used a secondary virtual currency, known as Tether, which was created and sold by the owners of Bitfinex, to buy up those other cryptocurrencies.
To reach this conclusion, the paper's two authors "sifted through an incredible 200 gigabytes of trading data, equal to the troves that the Smithsonian Institution collects in two years," according to a new article in Fortune, "and followed sales and purchases from 2.5 million separate wallets."

The researchers ultimately concluded that a single, still unidentified, Bitcoin "whale" triggered nearly 60% of Bitcoin's one-year rise in 2017 from under $1,000 to over $19,000. But more importantly, Fortune now reports that Griffin "suspects that a similar dynamic is operating today." Toward the end of 2022, another mystifying trend caught Griffin's eye. Despite the crypto crash and myriad other negative forces, every time Bitcoin briefly breached the $16,000 floor, it bounced above that level and kept stubbornly trading between $16,000 and $17,000. Almost unbelievably, as the crypto market has continued to unravel into 2023, Bitcoin has gone in the opposite direction, trading up 35% since Jan. 7 to $23,000.

"It's very suspicious," Griffin told Fortune. "The same mechanism we saw in 2017 could be at play now in the still unreal Bitcoin market."

For Griffin, the way normally super-volatile Bitcoin went calm and stable in the stormiest of times for crypto fits a scenario where boosters are uniting to support and juice its price. "If you're a crypto manipulator, you want to set a floor under the price of your coin," added Griffin. "In a period of highly negative sentiment, we've seen suspiciously solid floors under Bitcoin."

It's important to note that no definitive proof of chicanery has so far emerged. "The space is bigger now so it's harder to dig the data," says Griffin. "Sophisticated players may be expert at hiding their identities." We have seen credible leaks asserting that major market participants call meetings of the sector's elite when they fear a crypto leader plans to make what they consider a reckless, industry-endangering move. But no evidence has surfaced that the players are gathering to coordinate buying of Bitcoin or other cryptocurrencies.

Fortune data editor Scott DeCarlo ran a detailed analysis and found, among other things, that Bitcoin "at peak FTX-induced turmoil showed both its smallest swings ever by a wide margin, and divergence from low to high that was one-fourth to one-fifth its average over the past six years." And they're not the only ones asking questions: In a blog post on Nov. 30 titled "Bitcoin's Last Stand," European Central Bank Director General for market operations Ulrich Bindseil and ECB adviser Jürgen Schaaf dismissed Bitcoin's resurgence as "an artificially induced last gasp before the road to irrelevance." Two leading figures on Wall Street told this writer on background that Bitcoin's price action, by resisting a flood of bad news, looks phony and different from a normal free market ruled by independent buyers and sellers.
Thanks to long-time Slashdot reader wired_parrot for submitting the story.
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Bitcoin's 2023 Price Rise 'Very Suspicious', Says Manipulation Researcher

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  • Makes sense (Score:3, Insightful)

    by quonset ( 4839537 ) on Saturday February 04, 2023 @12:44PM (#63265165)

    looks phony and different from a normal free market ruled by independent buyers and sellers.

    BR.

    After all, Bitcoin is phony since it's not in a true free market when you have unknown persons capable of pulling strings in the background. That and Bitcoin itself is phony to begin with.

    • Lots of legit sectors have plenty of quietly powerful people pulling strings in the background.

      The difference with bitcoin is its utter lack of relevance. We need to be paying attention when the oil barons form a cartel. It has direct, real-life impacts. It would be nice if all the cell phone manufacturers could meet and agree on a common plug standard, for the benefit of us all. There’s a reason most western countries have kinda-politically-independent central bankers that meet and manage the mon
      • Btc is up about 38% for the month... there are quite a few large capntech companies that are up about the same amount of not more... there is a correlation there for sure
      • If bitcoin crashes, a few weird shadowy owners lose a lot of “value” which really amounts to a slight change in a very specific computer file shared on a few million networked systems. And a bunch of true-believer crypto fools lose their shirts. The real world stakes are exceedingly low.

        If only that was the case.

        But it's like stocks. When the big players lose a lot on the stock market, a place of imaginary value, they will just make everyone else feel the pain.

        Because just like with stocks, people spend real money to buy those. And when they lose, whichever entity that money could have gone to (eg, paying off loans) will not get it back. And we saw what happens when a few banks don't get repaid their massive amount of loans. And it's not the people who owe them millions of dollars th

      • If bitcoin crashes, a few weird shadowy owners lose a lot of “value” which really amounts to a slight change in a very specific computer file shared on a few million networked systems.

        Actually the consequences would be a lot better than that; A whole criminal underworld of kidnappers, data ransomers, drug dealers and money launderers will lose everything they have in one big flash. Russia and Nigeria might have to file bankruptcy. The world will be a better place.

        • > kidnappers, data ransomers, drug dealers and money launderers

          I'm pretty sure they all stopped using bitcoin years ago. Too easily traceable. From what I understand it's mostly Monero or lesser-known stuff now. Bitcoin crashing might still have some effect, but I don't think it would significantly hamper their activities at this point.

          --
          We will soon have the option to harvest our farts, so we can post & comment on stats about them.
    • My go-to example are the videos YouTuber Adam Something put out about anarco capitalism. Short answer capitalism has winners and losers and the winners use their winnings to consolidate power and take all the winnings.

      This is why any sane economy is a hybrid approach. Essentially a form of socialism with a hint of capitalism. Neo-liberals try to do it without the socialism by just having the regulation but you screw up all the power dynamics and it breaks down. Communists try to do it without the capita
      • by shoor ( 33382 )

        My sig explains a lot of my philosophy about explanations. But I'll throw out a little more of my personal opinions/philosophy/whatever about economics here:

        Winston Churchill famously said something like "Democracy is a terrible form of government; it's just better than all the others."

        I'm inclined to say "Capitalism is a terrible economic system; it's just better than all the others."

        Generally speaking, theorists always seem to be trying to come up with some perfect system that they can wind up and get it

      • Re: (Score:1, Offtopic)

        Translated for those thinking tldr:

        "Class warfare noise, rich people bad, socialism is the golden key to a happy life for everyone despite a 100% history of failure, mass death, misery, starvation, and destruction of freedoms for normal people".

    • looks phony and different from a normal free market ruled by independent buyers and sellers.

      BR.

      After all, Bitcoin is phony since it's not in a true free market when you have unknown persons capable of pulling strings in the background. That and Bitcoin itself is phony to begin with.

      So using that way of thinking then Sterling, the British Pound which is one of the worlds reserve fiat currencies, must be phonye too given how George Soros was able to take action to manipulate its price in 1992.

      • The fact we know Soros made a bet against the Pound shows the two situations are not remotely the same. Also, Soros was not the only one taking advantage of the situation. A multitude of traders [thebalancemoney.com] also shorted the Pound when they saw what was happening.

        In no case was Soros, or anyone, manipulating anything. He and other traders made a bet, in the open, and won. Try again.

        A closer example would be the Hunt brothers from Texas. They owned so much silver they could move the price if they wanted. Which is exac [priceonomics.com]

        • Except the Hunt brothers got utterly smashed.

          I'm enjoying the slow grinding demise of bitcoin. Never forget, it is not up 35%. It is down about 2/3rds from 68k even after being manipulated up to 23k.

      • Yes, the last refuge of the conspiracy theorists to to point to Soros yet again.

    • by kipsate ( 314423 )

      unknown persons capable of pulling strings in the background

      You mean that the price of Bitcoin is being manipulated just as is happening to each and every other asset class? Wow, surprise!

  • by Opportunist ( 166417 ) on Saturday February 04, 2023 @12:49PM (#63265183)

    Nooo, that's unpossible! Bitcoin is decentralized, outside the reach of da man and his cronies, nothing the Wallstreet boys can manipulate!

    • by sound+vision ( 884283 ) on Saturday February 04, 2023 @01:53PM (#63265283) Journal

      It's probably not "Wall Street boys", they have solid control over their own domain, that is, the one that dominates the globe. There was an interest in co-opting cryptocurrency, a few years ago when it seemed it could mature into a "respectable" scam, of the type they usually run, but that seems to have died out.

      It wouldn't surprise me if the locus of Bitcoin manipulation was in East Asia. Don't they have most of the mining capacity? It also fits with the Chinese adapting the most manipulative aspects of "capitalism" over the last 20-30 years. Those parts of the Western system are in high regard among the Asian elite now. It's brought them much success. To grasp how much mindshare Western excess has, look at how massive the West's luxury brands are in China. Or how popular they are in Kim Jong Un's castle. (Doesn't that dude seem to like cryptocurrency as well?)

      Like so many others, the Bitcoin bros tried to run away from "the establishment", but ran right into another establishment, at least as bad as what they were running from.

      • Re: (Score:2, Flamebait)

        by Opportunist ( 166417 )

        Nonononono, bitcoins is supposed to make us ALL wealthy, everyone can mine, it's not just a game for the 1% again, everyone can mine coins and get rich.

        I wanna sit at home and have some mining rig magically turn megawatts of power into money for meeeeee! And no, I don't wanna know how that works, I just want the money!

        Wasn't that how it was supposed to work?

    • The best description I've ever read a Bitcoin and cryptocurrency in general is that there's speedrunning 200 years of financial history and regulation. The only problem is they're not going to come out the other end of that alive because there's no reason to add that much complexity head overhead to are existing banking system. It's all gristle and no meat
      • by The Evil Atheist ( 2484676 ) on Saturday February 04, 2023 @05:42PM (#63265627)

        speedrunning 200 years of financial history and regulation.

        Speedrunning is being too generous. They literally haven't gained any new abilities.

        Their "solution" is just to find the next big coin or exchange promising fast money, with no actual business plan other than market manipulation, and start the same journey over again. I mean, how is it possible that crypto continues to make the same simple mistakes? From Mt Gox, to the crypto queen, to other coins and exchanges to FTX.

        There's a special brand of idiot that keeps falling for the same tricks. This ain't no speedrunning. They're circlerunning. Running around in circles, never advancing.

      • by Briareos ( 21163 )

        "Billy Mitchell & Todd Rogers' Epic Wall Street Adventure"?

        Can't wait to see Twin Galaxies disqualify it...

  • Fake (Score:1, Interesting)

    OK, this is manipulation, Bitcoin costs literally nothing. I got it right, correct?

    Could you sell me your 10 bitcoins for nothing? I'm OK if you price them a little higher, let's say a buck for a pop. Could you sell me 10 bitcoins for ten dollars? Or buy them at this price?

    If there's no actual demand or if it's fake or pumped up artificially, the situation will resolve and bitcoin will lose its "value" soon enough. Why hasn't it happened yet? Don't forget that miners currently "produce" 900 bitcoins dai

    • Madoff's pyramid scam went on for years.
      The tulip craze went on for many years.
      Bitcoin has also gone on for years.

      So what?

      Is it written somewhere there's a time limit on scams to collapse after which they're "real"?

  • No liquidity (Score:5, Interesting)

    by Ritz_Just_Ritz ( 883997 ) on Saturday February 04, 2023 @01:10PM (#63265217)

    There's little danger of one or more of the whales suddenly cashing out and earning a windfall since such a large percentage of bitcoin and derivatives are held by a relatively small group of people. Even if one of them wanted to unload their stash, there's no buying at any appreciable scale. And it looks like the flow of new money from gullible investors has mostly dried up as a result of the widely publicized implosion of FTX and others.

    It will be interesting to see how these shadowy groups try to leave the market and transmute their poop into assets with actual value as the orbit around the drain shrinks and accelerates.

    • by fermion ( 181285 )
      Hopefully after it gets back to 10K
    • About the only thing they can do now is to prop up the price for as long as possible and grab at the few pennies still trickling in from buyers. I'm sure they cashed out enough over the past few years to be in the black, even if all the exchanges closed today.

      Now it's just a game of keeping a few minimally-staffed exchanges running to offload whatever they might still have. Who knows, maybe they'll start taking Magic: The Gathering cards as payment. Or GPUs from 6 years ago. Rummage sale mode.

    • The true measure of liquidity would be how much cash and other assets stand ready to be converted. That's impossible to know, since you'd have to read the minds of traders. For that reason, many hold that a better measure of liquidity is the bid-ask spread, and the long term trend of lower spreads [bitcoinity.org] seems to be holding, which indicates *more* liquidity, not less.

      There are plenty of reasons to hate Bitcoin, but this is not one of them.

    • Whales cash out OTC.

  • Comment removed (Score:5, Insightful)

    by account_deleted ( 4530225 ) on Saturday February 04, 2023 @01:27PM (#63265255)
    Comment removed based on user account deletion
    • ...because it's not zero. Considering that nothing of value is being exchanged, I think it's very fishy-smelling that anyone considers it to be worth anything at all.

      Those that are mining Bitcoin, have considerable expenses.

      If there is no such thing as a free lunch, then there sure as shit is no such thing as a worthless Bitcoin. Plenty are trading a lot in electrical costs for it.

      • Worth is an interesting term in this case. I am going to politely disagree with your usage.

        You say that bitcoin is worth something because a lot of electricity was used to generate the coins.

        Counter example: if I were to pay someone 10 million USD to mow my lawn, that does not make my lawn worth 10 million USD. It makes me stupid. The lawn is still the same value it had based on the local real estate prices prior to being mowed.

        Things are worth what someone else will pay for them. If someone were to pay

      • Comment removed based on user account deletion
        • My reply was to a very simple argument; questioning whether or not Bitcoin had any value "at all." My response was more targeting the exact why people spend a shitload of money on electricity mining Bitcoin. Because there IS inherent value far above "at all" in that activity. Not unlike mining gold.

          One could argue nothing "of value" is exchanged when billionaires pay obscene amounts of money for a piece of art they're going to store in a dark vault. Most humans looking at that transaction would agree. T

    • Re: (Score:2, Funny)

      by MrLogic17 ( 233498 )

      True, because bitcoin is totally different than US Dollars.

      When I give you a green piece of paper, backed by nothing, and holding no real value outside of you and I believing that it has value - that's totally nothing like bitcoin.

      • The US dollar doesn't have value because you and I think it has value. The US dollar has value because the **US Government** thinks it has value.

        So, completely different from Bitcoin.

      • Except that is not how fiat currency are valued.

        Fiat currency is an agreed upon unit of exchange that represents work, time, energy, objects, land and so on, so we don't have to directly trade labor and services for the things we need. It exists strictly to smooth the daily flow of economic life. It has that value because we -all- say it does, not just 2 random people.

        There is no equivalent for bitcoin. It is not generally and globally agreed upon that we can use bitcoin as a substitute for direct trade

    • people after 14 years still throw the argument that nothing of value is exchanged. the value is the ability to store wealth in a currency that has a fixed supply that's proven it's worth for 14 years and counting, that can be sent anywhere in the world for low fees, that does not need permission from a bank to be used.

      if your brain is so dense to understand this, picture a metal like gold, but this metal is gray and not appealing, it has no industrial use, it has no home or consumer use, but it's weightle
  • If you cut through all the speculation and misleading formatting, and if you understand that Tether is backed 1:1 with USD, you get: Mr. Griffin looked at the flow of digital tokens going in and out of Bitfinex and identified several distinct patterns that suggest that someone or some people at the exchange used USD, to buy up those other cryptocurrencies. This worked to push up prices. The paper's two authors "sifted through an incredible 200 gigabytes of trading data, equal to the troves that the Smiths
    • Tether isn't backed 1:1 by USD. They originally claimed it was but then had to backtrack when the price of BTC rocketed up. If you look at the Tether Transparency page it is merely pegged 1:1 and backed 100% by Tether reserves. When you look at Tether reserves the majority of it is in other crypto coins.
  • Perhaps the author has shorted Bitcoin and has released this paper to manipulate the price down.

    • Occam's razor to the rescue!

      Is bitcoin a giant scam where we've seen manipulation, theft on a grand scale, rug pulls, and every shenanigan imaginable.

      Or

      Is some random economic team analyzing the scam and reporting on it the way economic teams tend to do?

      Hmmmmm, this is a tough one! Wait! Both of the above are true! Yay! Glad we could solve that one and agree on the right answer.

  • Crypto be a scam, bruh
    • Re: Wowwee! (Score:5, Insightful)

      by Plugh ( 27537 ) on Saturday February 04, 2023 @03:10PM (#63265419) Homepage
      Crypto has become a scam largely thanks to crypto community being more about getting rich than about solving real engineering problems.

      There is absolutely a need for a peer to peer Internet currency that cannot be censored or controlled by governments or corporations. BTC was a great version 1.0. But BTC and most cryptos after did not continue working that problem. Instead it was smart contracts staking and NFTs. It should have been focused on scalability and uncensorability/anti-fragility.

      I know of only one crypto that has remained true to the intended usecase. That crypto is the only one actually being used primarily AS A CURRENCY - not as a Beanie Baby speculative device. The community is meritocratic and is heavy with both cryptographers and IT security folks.

      • I know of only one crypto that has remained true to the intended usecase. That crypto is the only one actually being used primarily AS A CURRENCY - not as a Beanie Baby speculative device. The community is meritocratic and is heavy with both cryptographers and IT security folks.

        Which one?

  • Every year's rise was suspicious.

  • Say it isn't so. You mean that Bitcoin is a scam and can be manipulated?

  • Artificial price supports usually fail in the long term.

    The problem is there are about half a dozen ways to take a short position, and since I'm not in the business, I don't know which (if any) is the right way. I'm afraid the transaction costs and bid-ask spread would probably make it a bad bet no matter what I choose.

  • It's suspicious that Bitcoin is on the rise...

    ...but it's perfectly normal for an entire stock market to sustain most of it's value through a pandemic and a recession?

    Gotta love it when the Kettle calls it for the Pot while trying to convince everyone else it's wearing pink polka dots.

    • by The Evil Atheist ( 2484676 ) on Saturday February 04, 2023 @05:32PM (#63265601)
      No. Those of us critical of Bitcoin have ALSO been critical of the stock market. The "$100 billion" "added" to Meta's "value", is just as bullshit. We have been critical of cryptocurrency from the beginning PRECISELY because it is, in all its operation, an unregulated market that would lead to - and is repeatedly being demonstrated - the very same problems as a free-for-all stock market.

      So no, there isn't a double standard. Only those who stupidly believed cryptocurrency's lies that only governments print money.

      And the "recession" caused by the pandemic is... caused by the pandemic. The recession was not structural. It was an external cause - a disease - not something that was inherent in the system, like the Wall St crash that caused WWII, or the subprime mortgage crash. That means when people start reliving their lives, the system's deficiencies isn't the thing preventing the cycle of business from happening. People still want to do business, unlike a structural recession where everyone is too conservative because they have no confidence in the system.

      Learn the difference, and maybe you won't get suckered in to financial scams.
      • I was thinking this more relates to the recent Adani Group crisis in India:

        https://www.bbc.com/news/world... [bbc.com]

        The #2 richest guy in the world just lost half his "value" last week.

        At the same time, if someone told me that the 2nd richest man in the world was corrupt, involving the corrupt Indian business community, and the corrupt Indian government, I would be shocked, shocked I tell you! A lot of greased pockets keeping the con going. At the same time not too subtle about it either, something like 3000% incre

  • Bitcoin IS real. Its price is dictated by supply and demand. Is it any less real than the U.S. dollar that has been devalued by the out of control printing of more dollars? If a single individual or a group of individuals want to set a floor on the price by using their own money to do so, that is their legal right to do so. No crime has been committed.
    • Beanie babies are also real.
    • Tulips are far more real than any of this shit. I have a bunch in my backyard right now. Where is your bitcoin?
      Which has more value?
      Hey you know during the tulip craze there were people trading their castles/mansions for tulips? Does that mean a tulip is worth as much as a huge mansion? No. It means people were temporarily fucking nuts. Then reality set in as it will for bitcoin bros.

  • Bitcoin and BSD are dying. We got it.

    "It's important to note that no definitive proof of chicanery has so far emerged. "The space is bigger now so it's harder to dig the data," says Griffin"

    So you have no evidence and this is just speculation by crypto-deniers. Got it.

    There is a very good reason for BTC to stabilize when the other shitcoins were crashing. Bitcoin is the original. If you still believe in decentralized cryptocurrency technology but you've been trusted in all these other leveraged, not really

    • by znrt ( 2424692 )

      If you still believe in decentralized cryptocurrency technology but you've been trusted in all these other leveraged, not really decentralized shitcoins and ponzi's like Ether... where do you turn?

      if you meant ethereum, it took less than 10 seconds for even a complete ignorant about cryptocurrencies like me to check that ethereum price graph in the last 5 years is very, very similar to that of bitcoin.

      do you have any other theory that can be dismissed with trivial google search?

  • Specifically housing. These are Federal Reserve minutes from 2009, released in 2015 [nytimes.com]:

    "Elizabeth Duke: So I think if we spent enough money, got enough of a hit right now, it would look like a floor on house prices, and we might have something every bit as good as a floor on house prices. It seems like the best time, when we have the synergies with the housing program, which should reduce foreclosures and should increase the ability to refinance. Both borrowers and purchasers are so incredibly hair-trigger sen

    • Bitcoin is not an asset by any standard.

      Your 2009 quote was about the government doing what it is supposed to do, balance the economy, keep it stable and make life livable for as many people as possible.

      Bitcoin in comparison is about... uh.... nothing. It's a pyramid scam headed to its true value: zero.

      • Bitcoin has a lot of similarities to non-voting, non-dividend-paying shares. Those have a long history of being treated as assets.

        • Non voting shares are still based on the company's total market value. Bitcoin is not based on anything but speculation and manipulation.

          • Non-voting shares, like voting shares, have prices set in the stock market by buyers and sellers. And that set sets the "market cap" of the company. There's no accounting-style "market value" of which each share is a fraction. An illustrative example: there was a deli in New Jersey that did 35,000 in sales and was valued at 100 million dollars in the stock market [cnbc.com], which was the total value of its shares. These values are set in the market, just like bitcoin.

            • The value of a share is the value of the company divided by the number of shares. This is a definition. It is not my opinion.

              The only potential subjective is the value of the company which is a known quantity which individual traders then discount or increase based on their own opinion of the future value of the company based on news, quarterly reports, gut feeling, the movement of the stars, etc.

              The value of bitcoin is purely speculative. There is no underlying company, entity, legal existing organizati

              • The value of a share is the value of the company divided by the number of shares. This is a definition. It is not my opinion.

                Wow. That is completely, and irretrievably wrong. Confidently stated though.

                So, this statement shows you should do a bit of reading on the subject. Check out how FINRA defines a company's value [finra.org], check out what what "market cap" means, and check out how Harvard Business school values a company. [hbs.edu]

                A company's value is defined by its share price (minus its debt). Not the other way around, a

  • Wash sales [accountingtoday.com] (seller selling to themselves to create transactions and set artificial prices) are a huge fraction of trading.

  • To put this in perspective, the Large Hadron Collider generates about one petabyte of data per second. This is filtered in real time, so that about 200 has been permanently stored for later analysis. A petabyte is one million times as much as a gigabyte.

  • I recently heard an interview with someone who "invested" ca. $2,500 in crypto and it is now worth over 80k. This was his first time "investing" in anything, and now he was the expert. The more I think about it, crypto is for people who never learned how to save and invest and have no desire to learn. They know it too, and instead of hard work over many years, they hope to take a few thousand and turn it into millions over night. But the only time-proven "investment" with those returns in such a short time
  • This highlights the fact that crypto is not a fair and transparent market, and its current state of manipulation makes it a questionable solution for society looking forward.

  • ... that is indeed the emperor's junk swinging around in in the breeze. You are not mistaken.

    Please do keep pointing out he is naked and that he is not wearing a fine new suit of clothes.
  • This could be very expensive for the manipulators if they spend a fortune propping BC up, only for it to fall anyway, UNLESS the tethers they used were not paid for but were deliberately unbacked.

The 11 is for people with the pride of a 10 and the pocketbook of an 8. -- R.B. Greenberg [referring to PDPs?]

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