Worries Grow That the Price of Bitcoin Is Being Propped Up
A growing number of virtual currency investors are worried that the prices of Bitcoin and other digital tokens have been artificially propped up by a widely used exchange called Bitfinex, which has a checkered history of hacks and opaque business practices.
In December, Bitfinex was subpoenaed by the Commodity Futures Trading Commission, a United States regulatory agency. The news, first reported by Bloomberg on Tuesday and confirmed by a source familiar with the subpoena but not allowed to publicly discuss an ongoing investigation, led to a sell-off in most virtual currencies.
The people behind Bitfinex issue a virtual currency called Tether. Unlike most digitals tokens, every Tether is supposed to be backed by traditional money — the United States dollar. New Tether tokens are issued when investors give them dollars. One dollar is worth one token.
Because of the credibility that comes with that tie to the dollar, Tether are often used to buy other virtual currencies like Bitcoin.
Is this a spun AI article? If so, that's a really impressive writeup.
If not, that's a really vapid collection of borrowed thoughts.
It's not clear to me that anyone in the article understands the basic logic of how USDT works. Here are some keywords from the article: "worried, checkered past, alarm bells, suspicions, risk of failure, unclear, concern." Here is a key phrase that does not appear in the article: "evidence of wrongdoing."
Here is my favorite part:
"The Bitcoin community is sensitive to the possibility of price manipulation because a team of academics published an article in early January suggesting that the price of Bitcoin was artificially inflated in 2013 by a single player operating on the largest exchange at the time, Mt. Gox.
One of the author’s of that paper, Tyler Moore, said it could be hard to tell if similar price manipulation were going on today, though he noted that a lack of transparency made it hard for anyone to be certain of anything."