Recently, the Justice Department in the United States have started a criminal probe against manipulation in Bitcoin prices. However, there are many expert traders who already believe that Bitcoin prices are surely manipulated as well. There are a few reasons as to why Bitcoin prices can be manipulated quite easily.
We will today list some of the reasons why Bitcoin prices can be easily manipulated.
Larger holders of Bitcoin:
There are a few individuals who are actually large holders of Bitcoin. As a result, price manipulation will actually help them immensely. In addition to that, as the number of coins which they have a significant, they can easily manipulate the prices as well. This is the reason why Bitcoin price manipulation is possible.
There are also cryptocurrency miners who actually have a significant amount of control over the mining network. When they have such a large control over the mining network, it is obvious that they will be able to change the Bitcoin prices quite easily according to the number of transactions which they verify. As a result, any capacity going off-line will take the Bitcoin prices down as well. This is the reason why it is important to always keep a watch on the Bitcoin prices. With such significant concentration in the hands of a few miners, manipulation is indeed possible.
Market manipulation is possible as well. Many a times, the prices of Bitcoin are different on different platforms. As a result, there is always the probability of arbitrage. When there is always the probability of arbitrage, it will indeed become easier for the users to manipulate the markets as well. This is another reason why manipulation is actually possible.
It remains to be seen whether the inquiry by the Justice Department of United States is able to curb this manipulation or not. Unless and until it is curbed, free markets will not be able to opt for price recovery. This is the reason why it is high time that there is some kind of regulation in the Bitcoin market so that the price discovery actually happens and the users are not impacted by manipulation in the Bitcoin prices. All will be dependent on the result of the inquiry which has been initiated by the US Department of Justice. It will be widely awaited. Keyword: US Department of Justice, Bitcoin, price manipulation