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Bitcoin Price Rally in December 2017 Was Orchestrated by One Whale: Research

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  • Alex Dovbnya
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    Crypto experts ridicule the updated Tether paper, which suggests that a lone Bitfinex user was able to propel the Bitcoin price to $20,000

Bitcoin Price Rally in December 2017 Was Orchestrated by One Whale: Research
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University of Texas Professor John Griffin and Ohio State University’s Amin Shams shared their updated research paper with Bloomberg where they double down on past claims that Tether, the biggest stablecoin issuer, was the sole reason the Bitcoin price surged to its insurmountable all-time high of $20,000 at the end of 2017. 

Now, the academics claim that a single Bitfinex whale was actually responsible for fueling Bitcoin's rocket to the moon. 

“Our results suggest instead of thousands of investors moving the price of Bitcoin, it’s just one large one.”

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A "parasitic lawsuit"

Griffin took a skeptical look at the crypto mania that took over the world and analyzed approximately two terabytes of trading data in order to get to the core of Bitcoin's success. He eventually found out that the price of the top currency was propelled by Tether purchases.       

“Tether seems to be used both to stabilize and manipulate Bitcoin prices,” Griffin and Shams wrote in their controversial paper that took the crypto industry by the storm in June 2018.      

As reported by U.Today, Tether and its affiliate exchange Bitfinex were slapped with a class-action lawsuit in October 2019 over market manipulations that allegedly led to $1.4 trln in damages. Tether called the lawsuit "meritless" while criticizing the study it was based on.  

This time around, the stablecoin issuer states that the update of the "foundationally flawed" paper was published in order to give more ground the "parasitic lawsuit."       

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Harsh criticism

Tether is not a lone critic. Some cryptocurrency influencers were also up in arms debunking the study on Twitter. BlockTower Capital CIO Ari Paul says that the academics behind the paper in question fail to understand how financial assets work. The fact that Bitcoin or gold is managed by one custodian doesn't mean that one person is actually responsible for trading it. 

VanEck's digital asset strategist Gabor Gurbacs says the research was conducted by "career academics" who have  no idea about how the Bitcoin market works. Tether issued more USDT because there was simply significantly more demand. 

Meanwhile, the creator of Bitcoin's stock-to-flow model PlanB accuses the mainstream media of pushing "coordinated Bitcoin FUD."

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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Crypto Expert Says Bitcoin and Ethereum Are 'Formidable' Collateral Economies

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    Holding Bitcoin as a collateral is the next big use case for the top cryptocurrency

Crypto Expert Says Bitcoin and Ethereum Are 'Formidable' Collateral Economies
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Contents

According to cryptocurrency influencer Chris Burniske, both Bitcoin and Ethereum already represent formidable collateral economies.

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Moving beyond a medium of exchange

In his earlier tweet, Burniske also predicts that holding Bitcoin as a collateral could eclipse its medium of exchange (MoE) use case.  

He even goes as far as claiming that Bitcoin could morph into an off-chain collateral for the world. 

Burniske states that Ethereum has already created a burgeoning collateral economy around it. Apart from extending its utility beyond a pure MoE, this could also drastically decrease the coin's volatility because of all DeFi use cases.   

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The next big thing in crypto

As reported by U.Today, Genesis Capital, a subsidiary of Digital Currency Group (DCG) that rules the roost in the cryptocurrency lending sector, had a record-breaking third quarter with a whopping $870 mln in new originations. 

In Q3, Bitcoin remained the best collateral for crypto with fiat money and altcoins breathing down its neck. The share of USD loans increased by 25 percent quarter-over-quarter.

However, a group of Wall Street traders made a dire warning about crypto lending, claiming that the breakneck speed of its growth could result in another crypto bubble. 

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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