3 ms·
I don't know, I followed all the ride very closely, and I don't think that manipulation played that big of a role. Bitcoin was clearly undervalued at the beginn
by josu 8y ago
I don't know, I followed all the ride very closely, and I don't think that manipulation played that big of a role. Bitcoin was clearly undervalued at the beginning of the year, when its price was around $1,000. Bitcoin needed a protocol update, however, the community couldn't agree on how to proceed, and there was the threat of a contentious fork, where bitcoin would split in 2. In the end, the protocol update was carried out (SegWit) and while there ended up being a fork (Bitcoin Cash) it wasn't the contentious fork everybody feared.
So once that all those threats were out of the way, the price of bitcoin started climbing really fast. Korean and Japanese people started buying cryptocurrency like there was no tomorrow and the market started to overheat. Koreans wanted to buy crypto so badly, that they were paying premiums of more than 40% compared to the rest of the world. Taxi drivers in the US were promoting ICOs, EOS had huge billboards in Times Square and the euphoria that goes hand in hand with every bubble started settling in.
But everybody knew that the price growth was outpacing the increase in usage of the technology, so once the CME futures launched in December, there were no more huge news in the horizon, and the price started deflating.
So was there some kind of price manipulation going on? Probably. But looking back there is really no need for price manipulation, you can explain the price increase using any economics textbook.
- paulpauper 8y agoBitcoin was clearly undervalued at the beginning of the year, when its price was around $1,000. how could such a determination be possible?
- josu 8y agoPerspective. We didn't know it at the time, but looking back it's pretty obvious. Once the issue of the forks and the SegWit activation was cleared, the price rose relatively fast. And I'm talking in relative terms; it was undervalued relative to what happened next.
- Jasper_ 8y ago> Once the issue of the forks and the SegWit activation was cleared, the price rose relatively fast. Yes, we know the ship is unsafe because otherwise the front wouldn't have fallen off! We know the price rose. This article is suggesting that the price rose not because it was undervalued, but because it was manipulated upwards by people pumping it up with fake numbers.
- josu 8y agoNo, that's not what the paper states. >From March 1, 2017 to March 31, 2018, the actual Bitcoin price rises from around $1190 to $7000 for a 488% return. In contrast, the price series without the 87 Tether-related hours ends at around $4100, a 245% rise >These 87 events account for less than 1% of our time series (over the period from the beginning of March 2017 to the end of March 2018), yet are associated with 50% of Bitcoin’s compounded return They don't claim that all the price increase is correlated with Tether, but that it was certainly a big factor.
- pbhjpbhj 8y agoSurely the price rose because people thought it would, self-fulfilling prophecy. Done of those people thought it would because that's how they were trying to pull the market. The people behind articles like this are presumably short on BTC.
- vkou 8y agoSpirit animals.
- thecrazyone 8y agolol. That's a keynesian reference if anyone was wondering :)
- DINKDINK 8y ago>how could such a determination be possible? At the start of 2017 there were still lots of uncertainties and risk about how the Bitcoin ecosystem would handle certain waring factions inside of it. Will businesses be able to write closed-door agreements and coopt the digital asset or Will the protocol remain immutable, continuing it's value proposition to the market. The second option succeeded, risk was removed: that's a reasonable thesis to a price appreciation. Markets hate risks/unknowns.
- sgspace 8y agoMaybe not "clearly undervalued" but at the beginning of 2017 the price surpassed the $1150 high from 2013 giving you a clue the sky is the limit.