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According to the New York Times, an academic paper has reached the conclusion that Bitcoin has been subject to price manipulation over the past year.

The paper, “Is Bitcoin Really Un-Tethered?”, was written by John M. Griffin and Amin Shams, a professor of finance at the University of Texas, and a Ph.D. candidate at the same institution.

The document is 66 pages long examines a hypothesis that cryptocurrency prices are being manipulated with the dollar-backed token Tether. It concludes that Tether is purchased in large amounts during market downturns, and Bitcoin price increases often follow.

The study focuses on a cryptocurrency exchange called Bitfinex. Bitfinex is one of the biggest cryptocurrency exchanges in the world, handling $7.6 million in trading volumes in the last 24 hours according to coinmarketcap.com. In February we examined its close relationship with Tether – Paradise Papers leaks revealed that Tether was created in the British Virgin Islands by two Bitfinex officials in 2014.

Griffin and Shams studied Bitcoin and Tether movements between March 2017 and March 2018 and noted that Bitcoin returns are “highly correlated” with Tether creation – furthermore “no abnormal returns are observed in months when Tether is not issued.”

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