The bloodbath in the digital currency market showed no sign of abating, with all major coins trading in the red Wednesday.
In the past 24-hours, a further $25 billion has been wiped off the total value of all cryptocurrencies, led by bitcoin, the world’s biggest digital currency, which reached its lowest level since Feb. 5. A single bitcoin BTCUSD, -3.78% traded to an intraday low of $6,133.31 and has since bounced to $6,287.73, down 3.7%, since Tuesday 5 p.m. Eastern Time on the Kraken Exchange.
The total value of all cryptocurrencies dipped below $270 billion in early afternoon New York trading, according to data from Coinmarketcap.
The move lower came after a research report found data that it said suggested the price of bitcoin may have been manipulated in late 2017.
Tether accused of manipulating bitcoin
In the University of Texas paper, researchers said they uncovered data that they believe shows Tether, a stable coin that is pegged to the U.S. dollar, was used to artificially push up the price of bitcoin during its late 2017 rally towards $20,000.
“Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in bitcoin and 64% of other top cryptocurrencies,” wrote John M. Griffin, a finance professor and Amin Shams, a graduate student.
Questions have surrounded Tether and crypto exchange Bitfinex, which were both subpoenaed by the Commodity Futures Trading Commission in 2017 seeking data on Tether and its backing of U.S. dollars.
Today’s findings will bring the 11th most traded cryptocurrency back into the spotlight.
“Overall, we find that Tether has a significant impact on the cryptocurrency market. Tether seems to be used both to stabilize and manipulate bitcoin prices,” they said.
In an email to MarketWatch, Bitfinex said “All Tethers (USDT) that are generated are the result of market demand, with every USDT in circulation fully backed by USD reserves. Neither Bitfinex nor Tether is, or has ever, engaged in any sort of market manipulation—such as what this paper alleges.”
Altcoins slump further
Altcoins, or coins alternative to bitcoin are showing significant losses Wednesday. Ether ETHUSD, -4.15% after trading above $1,000 in early 2018, has slumped below $500, last trading at $465.72, down 5.1% on the day. Bitcoin Cash BCHUSD, -4.17% is back below $1,000, trading down 3.6% at $832.80, Litecoin LTCUSD, -6.13% is under $100 at $92.33 and Ripple’s XRP XRPUSD, -5.64% is down 4.4% at 53 cents.
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