Posted on June 15, 2018 by staff

FinTech Crypto Briefing: Was Bitcoin’s price manipulated?


Bitcoin may now be hovering around the $6,500 mark, but not long ago the cryptocurrency had skyrocketed to almost $20,000 per coin.

Needless to say, the unexpected surge raised some eyebrows at the time: Was this the result of real demand from investors or was someone artificially inflating the prices?

A new research paper produced by the University of Texas is now suggesting that it was the latter.

The 66-page paper, authored by finance professor John Griffin and graduate student Amin Shams, has claimed data suggested that the price of Bitcoin and other cryptocurrencies was artificially inflated by someone connected to a named trading platform – something the platform’s CEO denied.

The report alleges that the platform used its own virtual coin, Tether, to generate fake demand for Bitcoin by buying up the currency and keeping its price up while its value sank at other exchanges. The more Tether entered the market, the higher the prices of other cryptocurrencies would rise, according to the study.

The researchers used algorithms to analyse millions of transactions on the blockchain, discovering that half of Bitcoin’s price increase in 2017 occurred hours after Tether was passed along to several other exchanges.

Although they stressed that the report is not conclusive and can’t confirm price manipulation, it has unsurprisingly received global media attention.

Apple joins the ranks of ‘crypto haters’

Tech giants including Google, Facebook, Twitter and Instagram have in recent months banned advertising for cryptocurrencies and initial coin offerings (ICOs) on their platforms.

Many wondered when Apple would be joining the ranks.

In an update to its developer guidelines for iOS and macOS, the iPhone maker has forbidden background cryptocurrency mining in any of its apps.

“Apps, including any third-party advertisements displayed within them, may not run unrelated background processes, such as cryptocurrency mining,” the new guidelines stated.

But there’s no need to panic. Although it sounds like an outright ban on cryptocurrencies, Apple says users will still be able to use their digital wallets to store virtual currencies.

Another hack, another drop

It’s rare to go a single week without reading about a cryptocurrency exchange being hacked – and this week was no exception.

The price of Bitcoin and other digital currencies suffered a sharp drop after a South Korean trading platform was infiltrated over the weekend.

After Coinrail revealed that it was a victim of a “cyber intrusion”, Bitcoin’s price fell by 10 per cent to its lowest point in two months. Other currencies including Ethereum and Ripple (XRP) were also dealt a major blow.

Finding the FinTech stars

In what I can only describe as another massive vote of confidence for the UK’s FinTech sector, Tech Nation has this week launched its first-ever programme to support the growing sector.

The organisation is calling on early-stage FinTech start-ups to submit their applications to join the nationwide programme, which will include a 24-hour induction, a series of in-depth learning sessions, five networking dinners and will culminate in a three-day showcase trip in mid-January 2019 to the US.

I spoke to Greg Michel, the FinTech and Insurtech lead at Tech Nation, who told me that this was a “key moment” for the sector in Britain.

To qualify, companies must be based in the UK, will need to be between seed and Series A stage and be able to demonstrate market success for their product.

“There are no other programmes in that bracket at the moment and that’s why we felt that we were complementing what was happening both earlier at the accelerator and incubator stage and also later at the scale stage,” Michel said.

On another note, BusinessCloud is also looking for the UK’s top innovators for our upcoming 101 FinTech Disrupters list.

A new era for Thailand’s crypto traders

Thailand is a tourist magnet famous for its beautiful islands, white sand beaches and delicious food but what you might not know is that the country is also surprisingly crypto-friendly.

There are 50 ICOs in Thailand that are currently applying for regulatory approval, and the country’s Securities and Exchange Commission (SEC) has said five are expected to be approved later this month.

Thawatchai Kiatkwankul, director of the SEC’s corporate finance division, said projects will need to have commercial value and go through vetting before they can be considered for registration.

If they go ahead, Thailand will become one of the world’s first nations to allow ICOs to proceed legally in a regulated environment.

That’s not to say that the UK is lagging behind. The government announced earlier this year that it will create a new task force to manage the risks around crypto assets and look at how we can harness the benefits of the underlying technology.