Nic Carter denies claims of Bitcoin rally manipulation by whale collusion made by professors John Griffin and Amin Shams. Griffin and Shams believe the current Bitcoin rise mirrors 2017, caused by manipulation by a single entity.
Griffin and Shams found Tether printing and manipulation to prop up Bitcoin price in a 2018 paper for the Journal of Finance.
Authors discovered Bitcoin’s price spike after 1-hour intervals with major Tether mints and purchases. 60%of Bitcoin’s gains from ’17-’18 showed a pattern of whale activity. The whale used Tether to buy Bitcoin on Bittrex/Poloniex, causing quick price changes in under an hour.
Authors suspect market player collusion in unfavorable market conditions supports Bitcoin’s price. Furthermore, they highlight Bitcoin’s narrow trading range ($16k-$17.9k for 62/63 days) after the FTX collapse as evidence of manipulation.
Griffin suggests that whales can manipulate the price of Bitcoin by coordinating to push it to $17,000 and then profiting through small sales, thus limiting its price range. Additionally, Griffin acknowledged lack of evidence for whale manipulation theory. Griffin concluded that no concrete proof exists, and potential collusion may surface through individual stories.
Furthermore, VC Nic Carter rejected the manipulation claims, calling the professor stupid and the claims about Tether inaccurate.
Griffin and Shams are genuinely too stupid to understand why their analysis is so wildly off baseTheir only skill is acquiring sniveling PR from credulous journalists https://t.co/m8frNt9bMw — nic carter (@nic__carter) February 2, 2023
Rise In Bitcoin’s Price Due To Reduced Forced Selling And Surplus of Buyers
The CFTC fined Tether $41 million for insufficient fiat reserves backing its stablecoin from 2016-2018, potentially leading to free money. Tether has since improved its holdings with higher-quality debt and liquid assets.
Moreover, analysts attribute the rise in Bitcoin’s price to reduced forced selling post-FTX collapse or more buyers than sellers. Thurman attributes the rise in Bitcoin’s price to a surplus of buyers over sellers. The collapse of market makers, including Alameda Research, has also reduced market liquidity and the number of sellers.
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Shorting an asset involves borrowing it and betting its price will drop. If the price rises, the broker may liquidate, causing a flood of buy orders. This can lead to a “short squeeze” and rapid price increase if many investors are liquidated.