Bitcoin isn’t all it has been cracked up to be, according to a new report by a University of Texas professor.
The report says that Tether, one of the most-traded cryptocurrencies, has shown a pattern of being spent on bitcoin at pivotal moments, assisting to drive bitcoin to a record price in December, according to a Bloomberg report on the study, which was authored by finance professor John Griffin.
“Tether seems to be utilized both to stabilize and manipulate Bitcoin prices,” according to the study, which was released on Wednesday.
Questions about Tether and Bitfinex have dogged the cryptocurrency world since last year, when Bitfinex lost banking relationships yet continued to operate, Bloomberg reported.
Both firms were subpoenaed in December by the Commodity Futures Trading Commission, which was searching proof that Tether is backed by a reserve of US dollars, as it claims. Neither Tether nor Bitfinex have been accused of wrongdoing.
“Bitfinex nor Tether is, or has ever, engaged in any sort of market or price manipulation,” Bitfinex CEO JL van der Velde told Bloomberg in an e-mailed statement. “Tether issuances cannot be utilized to prop up the price of Bitcoin or any other coin/token on Bitfinex.”
Griffin, known for spotting fraud in financial markets, co-authored the study, titled “Is Bitcoin Really Un-Tethered?,” with graduate student Amin Shams.
Bitcoin fell to its lowest price since Feb. 6 on Wednesday, to $6,371, as it struggles to find a stable support level.