The price of Bitcoin has plunged by almost half since the beginning of January in a ‘bloodbath’ which has seen the total value of the market plummet by about £31 billion. Now it’s been claimed that the huge price rises of last year may have been artificially ‘propped up’ by a rogue cryptocurrency firm.
In December 2017, Bitcoin reached a historic high of almost $20,000 (£14,000), before slumping to its current value of roughly $9,800 (£6,876). This catastrophic plunge may have been driven by the actions of a Bitcoin exchange called Bitfinex, it has now been suggested. This exchange stands accused of using a cryptocurrency called Tether to buy vast amounts of Bitcoin, which inflated its price.
Investigators from the US Commodity Futures Trading Commission are understood to have launched a probe into the cryptocurrency firm ‘This became more and more concerning, because every time the markets went down, you have seen the same thing happen,” Joey Krug, the co-chief investment officer at the crypto investment fund Pantera Capital told the New York Times. ‘It could mean that a lot of the rally over December and January might not have been real.’ A spokesman for Bitfinex and Tether, which are affiliated with each other, said in a statement: ‘We routinely receive legal process from law enforcement agents and regulators conducting investigations. It is our policy not to comment on any such requests.’ Bitfinex is an online platform that enables traders to buy and sell virtual currencies such as bitcoin and ether. One of the largest cryptocurrency exchanges in the world by trading volume, it is owned by a British Virgin Islands company and does not have a head office, Reuters reported in September.
