Researchers Neil Gandal, JT Hamrick, Tyler Moore, and Tali Oberman have written a fascinating paper on Bitcoin price manipulation.
Entitled “Price Manipulation in the Bitcoin Ecosystem” and appearing in the recent issue of the Journal of Monetary Economics the paper describes to what degree the Bitcoin ecosystem is controlled by bad actors.
To many it’s been obvious that the Bitcoin markets are, at the very least, being manipulated by one or two big players.
“This paper identifies and analyzes the impact of suspicious trading activity on the Mt.
Gox Bitcoin currency exchange, in which approximately 600,000 bitcoins (BTC) valued at $188 million were fraudulently acquired,” the researchers wrote.
The team found that many instances of price manipulation happened simply because the market was very thin for various cryptocurrencies including early Bitcoin.
“Despite the huge increase in market capitalization, similar to the bitcoin market in 2013 (the period examined), markets for these other cryptocurrencies are very thin. »