A prominent finance professor who famously exposed Bitcoin price manipulation during the 2017 bull run has raised fresh concerns about potential market manipulation in early 2023, suggesting that the cryptocurrency’s suspiciously stable floor around $16,000 and subsequent 35% rally may not be entirely organic.
John Griffin, a professor of finance at the University of Texas McCombs School of Business, told Fortune magazine on February 2, 2023, that the same mechanisms he uncovered in his landmark 2018 study could be at work again — this time propping up Bitcoin’s price during what should have been its darkest hour.
TL;DR
- UT Austin professor John Griffin, who proved BTC price manipulation in 2017, suspects similar activity in 2023
- Griffin found it “very suspicious” that BTC held a floor at $16,000 during the crypto crisis
- Bitcoin rallied 35% from January 7 to approximately $23,000 by early February
- Griffin’s 2018 study analyzed 200GB of data from 2.5 million wallets
- No definitive proof of current manipulation has emerged — Griffin says the market is now harder to analyze
The 2017 Manipulation Study
Griffin first made headlines in 2018 when he and co-author Amin Shams, then a doctoral candidate at McCombs, published a groundbreaking study revealing that a single unidentified Bitcoin whale had nearly single-handedly driven the token’s dramatic run-up in late 2017 and early 2018. The research was based on a staggering 200 gigabytes of trading data — an amount comparable to two years of data collected by the Smithsonian Institution.
The study traced transactions across 2.5 million separate wallets and found a striking correlation between the printing of a then-little-known stablecoin and jumps in Bitcoin’s price. The implication was clear: someone was using freshly minted tokens, supposedly backed one-to-one by the dollar, as essentially free money to inflate Bitcoin’s price for their own profit.
The paper sent shockwaves through the cryptocurrency industry and contributed to ongoing regulatory scrutiny of stablecoin issuers, particularly Tether.
A Suspicious Floor
Toward the end of 2022, another puzzling pattern caught Griffin’s attention. Despite the cascading failures of major crypto firms — including the spectacular collapse of FTX in November — Bitcoin refused to break below $16,000. Every time it briefly breached that level, it bounced back and traded stubbornly between $16,000 and $17,000 for weeks.
Then, as the broader crypto market continued to face headwinds in January 2023, Bitcoin did the opposite of what many expected: it surged higher, climbing approximately 35% from January 7 to reach the $23,000 range by early February.
“It’s very suspicious,” Griffin told Fortune. “The same mechanism we saw in 2017 could be at play now in the still unreal Bitcoin market.”
For Griffin, the way normally super-volatile Bitcoin went calm and stable during the stormiest period in crypto history fit a pattern where coordinated buyers were deliberately maintaining a price floor. “If you’re a crypto manipulator, you want to set a floor under the price of your coin,” he explained. “In a period of highly negative sentiment, we’ve seen suspiciously solid floors under Bitcoin.”
Harder to Prove in a Bigger Market
Despite his concerns, Griffin acknowledged that proving manipulation in 2023 would be significantly more challenging than in 2017. “The space is bigger now so it’s harder to dig the data,” he noted. “Sophisticated players may be expert at hiding their identities.”
The cryptocurrency market had grown substantially since Griffin’s original study, with daily trading volumes, the number of active wallets, and the variety of trading venues all multiplying several times over. This expansion made forensic analysis more complex, even as it potentially created more avenues for disguised market activity.
No definitive evidence of coordinated price manipulation had surfaced as of February 2023, though Griffin’s comments reignited a long-running debate about the role of stablecoins in cryptocurrency price formation and the adequacy of market surveillance in the digital asset space.
Industry Responds
The cryptocurrency industry largely pushed back against the manipulation narrative. Several market analysts argued that Bitcoin’s resilience was better explained by genuine fundamental factors, including a shift in Federal Reserve policy toward smaller rate hikes, improving inflation data, and growing institutional interest in digital assets following the FTX collapse.
Proponents of this view pointed to data showing that CME Bitcoin futures had begun a new uptrend in December 2022 and that the Grayscale Bitcoin Trust discount had started narrowing — both indicators of renewed institutional demand rather than manipulation.
Why This Matters
Griffin’s warnings served as an important reminder that the cryptocurrency market, despite its maturation, still operates with less oversight and transparency than traditional financial markets. Whether or not manipulation is occurring in 2023, the fact that a respected academic with a proven track record finds the price action suspicious should give investors pause. Understanding the potential for artificial price support is crucial for anyone allocating capital to digital assets, particularly during periods of seemingly inexplicable market strength.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions.
griffin literally traced 2.5 million wallets and 200GB of data to prove the 2017 pump was artificial. doubt he would make these claims lightly again
the fact that BTC held $16k like a rock during the FTX collapse was indeed weird. every other exchange token cratered but bitcoin just sat there.
hard to fake 35% in a month though. even if the floor was defended, the rally had real volume behind it
griffin himself says the market is harder to analyze now. so this is speculation dressed up as academic concern. interesting theory but no proof yet.