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Peter Tchir: 'Of Course Bitcoin Prices are Manipulated'

Written by:
Guest
Published on:
May/28/2018

News that the U.S. Justice Department has begun a probe into whether bitcoin prices were being manipulated has one Forbes contributor saying "Well, duh?  Of course they are."

Peter Tchir, the Head of Macro Strategy at Academy Securities writes:

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.

Tchir also points to miners having a large position and being motivated to manipulate the prices and the fact that regulated markets have been prone to this type of activity.

I am more shocked that anyone would be surprised that manipulation likely occurs in cryptocurrencies and their pricing. I will be interested to see how this investigation can proceed on things that occur on platforms I don't view as regulated  exchanges on products that I didn't think were securities.

For now, this is yet another reason to expect cryptocurrencies to continue to drift lower.

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