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Bitfinex Manipulated Bitcoin Price in 2017


It is undeniable how much hype Bitcoin and other cryptocurrencies received last year. It captured the attention of people who wanted to earn a good amount of money on cryptocurrencies. In fact, Bitcoin was bullish in 2017 starting from around $1,000 only to reach its all-time high of almost $20k. Unfortunately, things went in 2018. To give you an idea, Bitcoin is currently trading at around $6,400.

Though you can blame strict regulatory changes and herd mentality for the price swings, you also have to take a closer look at the claims by experts that there is a possibility of price manipulation. Just to give you an idea, there are whales that take control of 28{4ede17fdd9b4ce8121d01fc4b54913fe84f8215aace504cc657695cefb5329ff} of the total amount of Bitcoin. That’s a total of 1,600 whale wallets.

Is Bitfinex Involved?

In addition to this, researchers at the University of Texas took a closer look at Bitfinex exchange and the virtual currency Tether. The cryptocurrency Tether was created by Bitfinex owners. The paper was co-authored by a finance professor who is widely known for his ability to trace fraud in financial markets. The paper reveals that there are distinct patterns that actually suggest market manipulation within the crypto market.

According to the paper, Tether was used by Bitfinex in order to generate demand for Bitcoin by buying up the digital currency and keep its price up while the complete opposite happens in the other crypto exchanges. According to the paper, the more Tether entering the market, the higher the crypto prices rise. It is said to be quite similar when printing money creating an inflationary effect.

One indication that can raise some questions is that when millions of transactions were analyzed, Bitcoin’s price is bullish last year just hours after Tether passed along several exchanges. And also, Tether usually exchanged hands when Bitcoin’s price was going down.

Tougher Regulations

One of the reasons for tougher regulations within the industry is the possibility of having market manipulation. In fact, the SEC, despite being supportive of the blockchain technology is quite concerned about the possibility of market manipulation. Despite the fact that Jay Clayton clarified that cryptos can never be considered as securities, SEC remains concerned and even stressed the need for regulations within the space.

The US Department of Justice is also investigating the possibility of Bitcoin price manipulation. Among the things that they are focusing their attention to is spoofing and wash trading. These are some common strategies that have been used in more traditional financial markets. DOJ is now working with Commodity Futures Trading Commission which is the body in charge of regulating cryptocurrency derivatives.

However, there is a problem with this. CFTC can only regulate futures based on digital currencies and not the actual coins.

Is there really something questionable with the practices of Bitfinex? Remember that in December, US Commodities Futures Trading Commission subpoenaed Bitfinex along with Tether. It was done after its investors are concerned about the possibility of price manipulation. In reaction to the concerns of their investors, Tether called their relationship off with their audit company. The audit company was actually the one in charge of internal auditing.


Mark Ayesa

Mark manages our editorial team, social handles and is always on the lookout for great writing talent to contribute to our site. On a day-to-day basis he ensures the content on is of the highest quality and also carries out extensive research on any current hot topics of the crypocurrency world for our writers.