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The Bitcoin craze that took the stock markets by storm last year may have been no more than market manipulation, according to a study released on Wednesday by the University of Texas.

The study claims that Tether, another digital currency tied to the U.S. dollar, may have been used to artificially inflate Bitcoin prices. The paper stated that at least half of the 2017 rise of Bitcoin prices could be attributed to coordinated price manipulation.

“These patterns cannot be explained by investor demand proxies but are most consistent with the supply-based hypothesis where Tether is used to provide price support and manipulate cryptocurrency prices,” the first page of the study read.

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University researcher John Griffin and grad student Amin Shams analyzed blockchain purchases made on the cryptocurrency exchange Bitfinex during Bitcoin’s rise. They found that significant Tether purchases were made directly following downturns in the market to help stabilize and manipulate the price of the cryptocurrency.

“Fraud and manipulation often leave footprints in the data and it’s nice to have the blockchain to track things,” Griffin told CNBC.

Fearing that market manipulation may play a factor in the value of cryptocurrencies, the United States Department of Justice launched a criminal probe at the end of May into whether traders were manipulating the price of bitcoin and other digital currencies.

The investigation is looking at potential illegal practices that could influence prices such as spoofing, or flooding the market with fraudulent orders to trick other traders.

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However, in recent weeks, the price of Bitcoin has been anything but good news for investors. The value of the contentious cryptocurrency fell to a four-month low of US$6,370 on Wednesday, just days after the South Korean digital currency exchange Coinrail said hackers had stolen over US$37 million, or almost a third of the currency it had in tow.

Bitcoin’s value reached an all-time high of over US$20,000 at the end of 2017, but its value came crashing back down in the new year and has continued the steady spiral since.

Experts previously told Global News it’s extremely difficult to determine the real value of Bitcoin due to its extreme volatility and trading practices that may manipulate behaviour in unregulated exchanges.

Andreas Park, an associate professor of finance at the University of Toronto, previously said because the digital currency has been assigned value in an unregulated exchange, Bitcoin became a bubble the the moment the enterprise rose above zero.

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He also reiterated that since the trading practices of Bitcoin are unregulated, the market is often subject to nefarious activities, such as manipulating the market through major Tether buys.

“There’s 60, 70, even 100 exchanges where you can trade cryptocurrencies of many different kinds. You could open one yourself,” Park said.

“In contrast to the financial world, there is absolutely zero regulation.”

In addition, he said there is a small group of people with a lot of stock in Bitcoin and other cryptocurrencies. Park said this often leads to“manipulative behaviour,” which refers to the practice of artificially inflating the price of an asset for personal gain.

The authors of the University of Texas study discovered similar behaviours in their research. In tracking periods of suspicious Bitcoin price activity, they found that these periods were tied to the issuance of Tether.

“It was creating price support for bitcoin, and over the period that we examined, had huge price effects,” Griffin told CNBC.

“Our research would indicate that there are sophisticated people harnessing investor interest for their benefit,” Griffin.

The CEO of Bitfinex denied Tether can be used to manipulate the price of other cryptocurrencies.

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“Bitfinex, nor Tether, is, or has ever, engaged in any sort of market or price manipulation. Tether issuances cannot be used to prop up the price of Bitcoin or any other coin/token on Bitfinex,” J.L. van der Velde told CNBC in an email.

-With a file from Reuters.