In 2013, bitcoin was worth just $150 when suddenly, the price spiked.
Within two months, one bitcoin was worth $1,000. Four researchers from the Tandy School of Computer Science at The University of Tulsa and the Berglas School of Economics at Tel Aviv University now believe that this spike was caused by one individual person.
In a paper titled "Price Manipulation in the Bitcoin Ecosystem," published in the Journal of Monetary Economics, Neil Gandal, JT Hamrick, Tyler Moore and Tali Oberman describe the ways in which suspicious activity on the Mt. Gox bitcoin currency exchange impacted the value of the cryptocurrency in 2013.
As reported by TechCrunch, their research calls attention to the potential risk of price manipulation and fraud withing cryptocurrencies. "If bitcoin wants to be taken seriously it probably shouldn't be this easy or legal to manipulate the markets," writes John Biggs for the publication.
Unlike traditional currencies, bitcoin does not have a central authority. Instead, cryptography is used to oversee transactions, manage supply and prevent fraud. Gandal et al. analyzed data that had been anonymously dumped in 2014 after allegations that 650,000 bitcoins had been fraudulently taken.