Researchers Neil Gundal, JT Hamrick, Tyler Moore and Tali Oberman wrote a fascinating article about manipulating prices for bitcoins. Under the title "Price Management in the Bitcoin Ecosystem" and in a recent issue of The Journal of Monetary Economics, it is described to what extent the bitcoin ecosystems are controlled by bad actors.
For many, it was clear that Bitcoin markets were at least managed by one or two major players. "This paper defines and analyzes the impact of suspicious trading activities on the Mt. Gox, in which a deceitful acquisition of approximately 600,000 bitcoins (BTC) worth $ 188 million was made, "the researchers write. "In both periods, the USD-BTC exchange rate rose by an average of four percent on days when there were suspicious transactions, compared with a slight decline in days without suspicious activity. Based on a thorough analysis with extensive reliability checks, the document shows that suspicious trading activity probably caused an unprecedented surge in the US dollar exchange rate at the end of 2013, when the rate jumped from $ 150 to more than $ 1,000 for two months. "
The team found that many cases of price manipulation occurred simply because the market is very affordable for various new cryptocurrencies. "Despite the huge growth in market capitalization, similar to the market of bitcoins in 2013 (the period under consideration), the markets for other cryptocurrencies are very transparent. The number of cryptocurrencies increased from about 80 during the period under review to 843 today! Many of these markets are easily accessible and prone to price manipulation. "
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Recently we reported that China is going to ban Bitcoin mining.