November 5, 2019 at 8:40 am UTC · 2 min read
Several prominent blockchain company executives have said that a recent study claiming a single investor likely manipulated Bitcoin to its record high of $20,000 in December 2017 is misleading and that it is based on a misunderstanding.
The study, done by John Griffin and Amin Shams from University of Texas and Ohio State University, noted that its findings indicate the move of Bitcoin to its all-time high in 2017 wasn’t caused by thousands of investors, but rather by one large “whale.” Griffin said:
“Our results suggest instead of thousands of investors moving the price of Bitcoin, it’s just one large one. Years from now, people will be surprised to learn investors handed over billions to people they didn’t know and who faced little oversight.”
However, many strategists and executives in the cryptocurrency industry have said that the data has been misinterpreted, acknowledging that a single custodian is equivalent to one person.
Difference between one custodian and one person
Ari Paul, the co-founder at BlockTower Capital, said that the logic in claiming that the spike of bitcoin in 2017 was fabricated because most of the trading activity came from one platform is like saying that traditional financial assets are manipulated because most of their volumes come from custodians.
“Their ‘research’ is based on an elementary misunderstanding of how financial assets work. It’s like saying that GLD (gold ETF) is traded mostly by 1 person because it has a single custodian and a single entity handling creations and redemptions,” said Paul.
2/ in simple terms: both GLD (and all ETFs) and tether have a single entity through which all creation of the asset flows.