Back in late 2017 when bitcoin spiked to nearly $20,000 seemingly overnight, we felt like Ice-T trying to bag a perp: Was it Adam Smith’s ghost, or something more mischievous?
We’ll take something more mischievous. A new study in the Journal of Finance suggests 2017’s price surge was the doing of an unknown manipulator operating from a single account at Bitfinex, then the largest crypto exchange.
- The nitty-gritty: The study’s finance professor authors argue the so-called whale used a dollar-pegged cryptocurrency called tether to ratchet up demand for bitcoin when bitcoin fell below certain price thresholds. That misconduct may have led to this: