Our speakers have a diverse and varied background in cryptocurrency, each one with their own story of how and why they followed “the rabbit hole” in search of bitcoin’s secrets.
Mitchell Moos - Editorial Manager of Cryptoslate - The front page of crypto
Kristy-Leigh Minehan - CTO of Core Scientific, an AI and Blockchain Company
Brent Lyman - Private Client Services/Wealth Management, Coinme
Jonathan G. Blanco - CEO and Founder TF Blockchain
For three to four months, bitcoin had been in “slow mode” hovering around 3,000. Then, on April 1, 2019, seemingly out of nowhere, bitcoin spiked to above 5,000. This cause was so surprising, even shocking to some, that people thought the reported spike in bitcoin must have been an April Fools joke.
So, our group of knowledgeable and esteemed speakers convened at the TF Blockchain offices in Seattle to share their unique perspectives on the cryptocurrency ecosystem, blockchain technology, and to ultimately answer the question, What Happened to Bitcoin?
After all the public speculation, industry conversations, and theoretical discussions, our speakers agreed that it all boiled down to one thing, and one thing only: price manipulation. But the perspectives on how the price was manipulated, and why, was still left up to interpretation as volatile as bitcoin itself.
Mitchell Moos, Editorial Manager of Cryptoslate - the front page of crypto, stated that one theory of how the price was manipulated started with a controversial crypto company called Tether. Tether produces a crypto-fiat stablecoin called USDT that is backed (or tethered) one to one with the US dollar. Around the same time bitcoin started spiking, Tether started minting 400 million coins or $400,000,000 worth of this crypto currency. Mitchell continued, “This is a reoccuring theme in bitcoin’s markets in general where the market is small enough [that] a few people with a significant amount of money can cause shifts in terms of where the trend of the market is going and influence the price of bitcoin substantially” (Moos TF Blockchain Podcast).
Kristy-Leigh Minehan of Core Scientific echoed the same theory as Mr. Moos, “it is price manipulation however it is not unique to bitcoin” (Minehan TF Blockchain Podcast). Kristy-Leigh continued, “This happens all the time in stock markets where hedge funds move all of their stock from one account to the next, or to other investment funds that they manage. This is a common thing to do if you want to arbitrage opportunities” (Minehan TF Blockchain Podcast). Core Scientific tracks all of the currency movements on a global scale, including wallets tied to certain whales, exchanges, and how money flows in and out, and as Kristy-Leigh noted, “it was very interesting that for some reason, $600,000,000 moved out of a bitcoin wallet to Tether and back again three separate times, all involving the same addresses” (Minehan TF Blockchain Podcast).
In talking to manufacturers in China, as Kristy-Leigh described, this money movement is a common theme. Over the past six years, whenever there are new machines being released from mining, companies will artificially inflate the price to sell off their old equipment and move on to the new equipment. Kristy-Leigh states, “If you control 70% of the market, you’re obviously going to try and do whatever you can to inflate the price and take advantage of that. Really, it’s kind of sad to see, but also a reoccurring theme in this ecosystem” (Minehan TF Blockchain Podcast).
Brent, an advisor with Private Client Services at Coinme, came with a different point of view of this exchange altogether, calling the money movement from a trader’s perspective sophisticated and beautiful. “The trade was spread across three different exchanges and it was $100,000,000. The three different exchanges that it was spread across just happens to be what BitMax, which is a derivatives market, uses for their index. So when you hit $100,000,000 on those order books and dried them up, you wiped out another $498,000,000 in derivative shorts - short interest that was leveraged against bitcoin that helped exasperate the price all the way up” (Lyman TF Blockchain Podcast).
Three different speakers, from three different companies, with varying interests in bitcoin and blockchain all coming to the same conclusion as to why bitcoin spiked in April 2019: price manipulation.
Listen to the audio from the event below. We apologize for the audio quality.
Check back with TF Blockchain next week as our speakers continue their discussion on bitcoin and FOMO.
By: Erin Lowe, Writer @ TF Blockchain