Price Manipulation in the Bitcoin Ecosystem

35 Pages Posted: 30 May 2017 Last revised: 21 May 2018

See all articles by Neil Gandal

Neil Gandal

Berglas School of Economics, Tel Aviv University; Centre for Economic Policy Research (CEPR)

JT Hamrick

University of Tulsa - Tandy School of Computer Science

Tyler Moore

University of Tulsa - Tandy School of Computer Science

Tali Oberman

Tel Aviv University - Eitan Berglas School of Economics

Date Written: May 2017

Abstract

We identify and analyze the impact of suspicious trading activity on the Mt. Gox Bitcoin currency exchange between February and November 2013. We discuss two distinct periods in which approximately 600,000 bitcoins (BTC) valued at $188 million were acquired by agents who likely did not pay for them. During both periods, the USD-BTC exchange rate rose by an average of four percent on days when suspicious trades took place. On days without suspicious activity, the exchange rate remained at. Based on rigorous analysis with extensive robustness checks, we conclude that the suspicious trading activity likely caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months.

Keywords: Bitcoin, Crytocurrencies, Price Manipulation

Suggested Citation

Gandal, Neil and Hamrick, JT and Moore, Tyler and Oberman, Tali, Price Manipulation in the Bitcoin Ecosystem (May 2017). CEPR Discussion Paper No. DP12061. Available at SSRN: https://ssrn.com/abstract=2977479

Neil Gandal (Contact Author)

Berglas School of Economics, Tel Aviv University ( email )

Tel Aviv University
Tel Aviv 69978
Israel
+972 3 640 9907 (Phone)
+972 3 640 9908 (Fax)

HOME PAGE: http://www.neilgandal.com/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

JT Hamrick

University of Tulsa - Tandy School of Computer Science ( email )

E 5th Pl
Tulsa, OK 74104
United States

Tyler Moore

University of Tulsa - Tandy School of Computer Science ( email )

E 5th Pl
Tulsa, OK 74104
United States

Tali Oberman

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel

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