A sharp rise in bitcoin prices pushed the cryptocurrency above $30,000 (£24,118) for the first time since June 10 last year, just before crypto lending firm Celsius took to the streets. freezes withdrawals in anticipation of its collapse.
Even given this rally, the token is still well below its all-time high of $68,000 in November 2021, and well below where it was before the failure of the stablecoin Terra caused “winter crypto”.
Nonetheless, the recent steady rise in bitcoin’s value has sparked talk of another cryptocurrency boom — and reignited fears of widespread market manipulation.
The collapse of Silicon Valley Bank last month and the wider contagion it unleashed on financial markets has led some cryptocurrency fans to turn to bitcoin, the industry’s original and most valuable token, as a way to hedge against fears that the entire traditional “fiat” economy would collapse.
This attitude was exemplified by American venture capitalist Balaji Srinivasan, who in March bet $1 million that the price of a single bitcoin would surpass $1 million by June this year. His assertion was that the US dollar would soon experience hyperinflation, causing the dollar value of bitcoin to skyrocket.
“This is when the world rebrands bitcoin as digital gold, returning to a pre-20th century-like model,” he tweeted, explaining the bet. “It will all happen very quickly once people check what I say and see that the Federal Reserve lied about how much money there is in the banks. All dollar holders are destroyed.
Alex Adelman, managing director of bitcoin rewards app Lolli, said Monday’s rally “had no clear catalyst” but was “an indicator of new bullish market conditions in the bitcoin and strong investor confidence”. Bitcoin’s continued strength suggests that bitcoin is emerging from the so-called “crypto winter” into a new phase of strength and renewed interest from retail and institutional investors.
But the recovery, after bitcoin prices hovered at $28,000 for nearly a month before surging to the final $2,000 in one day, also raised concerns about market manipulation.
A 2022 report from the US National Bureau of Economic Research found that “wash trading,” the practice of selling cryptocurrencies between related parties to influence the reported price, averaged “more than 70% of reported volume” on 29 unregulated exchanges.
In June 2022, the United States Securities and Exchange Commission (SEC) denied approval to launch a bitcoin-linked exchange-traded fund, which would allow investors to buy exposure to the cryptocurrency on stock markets. public, after concluding that the fraud cannot be prevented. and market manipulation to affect the price.
In addition to fictitious trading, the SEC said the market could be influenced by individuals with a “dominant position” in bitcoin manipulating its prices, fraud and manipulation on trading platforms, and manipulation activities. involving stable parts “including fasteners”.