OnDemand WTP Pricing Research

I Would Be Shocked If Bitcoin Prices Weren’t Manipulated | Forbes

According the FT and Bloomberg the Justice Department has opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies.  Well, duh?  Of course they are.

Whether the activities meet the legal definition of manipulation  or can lead to a criminal indictment remains to be seen, but I’d be shocked if there wasn’t manipulation of prices occurring.  Never forget Rule #2 of the 3 Rules of Bitcoin – “There are no rules!”

I would expect to find problems with price manipulation because

There are allegedly several very large holders of Bitcoin (and other cryptocurrencies).  The concentration of wealth gives them the incentive to push prices higher.  In the stock market, anyone holding a large proportion of the outstanding security is subject to additional rules and scrutiny.  No such protections exist for cryptocurrency.  The person telling you about how great it is, may be very incentivized to see the price go higher.  Whether or not this falls under the definition of manipulation that is being investigated, assume it occurs and assume it distorts price.

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I Would Be Shocked If Bitcoin Prices Weren’t Manipulated.