- Telecommunications Giant Vodafone Leaves the Libra Association
- Group of Central Banks Assesses Developing Central Bank Digital Currencies
- South Korea Might Impose 20 Percent Tax on Cryptocurrency Profits
- Report: Terrorists Increasingly Use Crypto to Raise Funds Anonymously
- Canadian Securities Administrators Subject Crypto Exchanges to Securities Laws
Crypto experts have indicated that Chicago Mercantile Exchange (CME) may be manipulating the price of Bitcoin(BTC)trade in a systematic order. A recent research article by a Norwegian crypto news group, Kryptografen, has waved red flags over a shocking discovery of sharp plunges in Bitcoin’s value each time CME contracts expire.
Another news group, TrustNodes, has consistently lobbied for a case against Wall Street’s institutional involvement in the valuation (and devaluation) of Bitcoin. The news group has presented dropping figures of devaluation that were following a systematic trend. For example, the experts highlighted the fact that on any random day, the digital currency would fall at 0.06% but before any CME settlement, an average of 2.27% was lost.
Another research group, Arcane Research, came up with similar results. Their findings pointed to a price variation of 0.04% on average days whereas just before CME settlements, the price would drop at an average rate of 1.99%.
Kryptografen has conducted a temporal study on Bitcoin valuation, specifically monitoring the price behavior from January 2018 to August 2019. The cryptocurrency experts again identified a startling pattern where 75% of the times before CME released payouts, the value of Bitcoin plummeted.
CME was one of the first derivatives marketplaces to launch Bitcoin futures back in December 2017. Since then, major stakeholders have expressed interest, and this year experts predict frequent all-time highs for trading volumes.
Kryptografen insists that in the face of such consistent percentages and irrefutable statistics, it is unlikely that price drops occur coincidentally. Therefore, it can logically be inferred that price drops have a high correlation with CME settlements.
Further Cryptocurrency Study Is Needed
A plausible explanation as to why price manipulation may occur at institution level is that traders at Wall Street seek to secure their positions (against price variations) by buying “physical” Bitcoin in the spot market. These traders will experience minimal jolts whenever devaluation occurs in the short term but in the long term, they will reap rewards of price appreciation.
So far, only quantitative analysis has been presented by the crypto experts to substantiate their claims. But a supplementary qualitative study needs to be conducted across the board to get a wholesome view of the situation. This involves meeting with the officials at Wall Street and CME to discuss the statistical results that crypto experts are keenly relying on.
On September 27, another chapter of CME settlement will be released, and experts are consistently of the view that the digital currency will face another wave of devaluation. CME also plans to launch Bitcoin options in 2020, broadening more its line of crypto-based financial products.