Understanding the Bitcoin Pump and Dump...

...as bitcoin takes another price hit.

Bitcoin just crashed even more https://t.co/fkEIet02bd pic.twitter.com/892xqeCRiP

— Joe Weisenthal (@TheStalwart) June 13, 2018

A concentrated campaign of price manipulation may have accounted for at least half of the increase in the price of Bitcoin and other big cryptocurrencies last year, according to a paper by an academic with a history of spotting fraud in financial marketshttps://t.co/4setEnIEEU

— Nouriel Roubini (@Nouriel) June 13, 2018

From the New York Times:

 A concentrated campaign of price manipulation may have accounted for at least half of the increase in the price of Bitcoin and other big cryptocurrencies last year, according to a paper released on Wednesday by an academic with a history of spotting fraud in financial markets.

The paper by John Griffin, a finance professor at the University of Texas, and Amin Shams, a graduate student, is likely to stoke a debate about how much of Bitcoin’s skyrocketing gain last year was caused by the covert actions of a few big players, rather than real demand from investors...

“There were obviously tremendous price increases last year, and this paper indicates that manipulation played a large part in those price increases,” Mr. Griffin said...

Sarah Meiklejohn, a professor at the University College London who pioneered this sort of pattern spotting, said the analysis in the new paper “seems sound” after reviewing it this week.

Philip Gradwell, the chief economist at Chainalysis, a firm that analyses blockchain data, also said the study “seems credible.” He cautioned that a full understanding of the patterns would require more analysis.

-RW