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'' The self-regulatory organization FINRA and the North American Securities Administrators Association have both issued investor alarms about bitcoin.177178
An official investigation into bitcoin dealers has been reported in May 2018. The U.S. Justice Department launched an investigation into possible price manipulation, including the techniques of spoofing and wash trades.180181182 Dealers in the U.S., the U.K, South Korea, and maybe other countries are being investigated. Brett Redfearn, head of the U.S.
The U.S. national investigation was motivated by concerns of possible manipulation during futures settlement dates. The final settlement price of CME bitcoin futures is determined by prices on four exchanges, Bitstamp, Coinbase, itBit and Kraken. Following the first shipping date in January 2018, the CME asked extensive detailed trading information however a few of those exchanges refused to supply it and later provided only limited information.
Academic research published in the Journal of Monetary Economics concluded that cost manipulation occurred during the Mt Gox bitcoin theft and that the market remains vulnerable to manipulation.186 The history of hacks, fraud and fraud involving bitcoin dates back to 2011.187
Research by John M. Griffin and Amin Shams in 2018 indicates that trading related to increases in the amount of the Tether cryptocurrency and associated trading in the Bitfinex exchange account for roughly half of the price increase in bitcoin in late 2017.188189
J.L. van der Velde, CEO of both Bitfinex and Tether, denied that the claims of price manipulation:"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. "190
The Bank for International Settlements summarized several criticisms of bitcoin in Chapter V of the 2018 annual report. The criticisms include the lack of stability in bitcoin's cost, the high energy consumption, high and variable transactions costs, the bad security and fraud in cryptocurrency exchanges, vulnerability to debasement (from forking), and also the influence of miners.191192193.
Bitcoin and other cryptocurrencies have been identified as economic bubbles by at least eight Nobel Memorial Prize in Economic Sciences laureates, including Robert Shiller,195 Joseph Stiglitz,196 and Richard Thaler.19713 Noted Keyensian economist Paul Krugman wrote in his New York Times column criticizing bitcoin, calling it a bubble and a fraud;198 and professor Nouriel Roubini of New York University called bitcoin the"mother of all bubbles. "199 Central bankers, including former Federal Reserve Chairman Alan Greenspan,200 investors like Warren Buffett,201202 and George Soros203 have said similar views, as have business executives such as Jamie Dimon and Jack Ma.204.
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Bitcoin has been criticized for the amount of electricity consumed by mining. As of 2015update, The Economist estimated that even though all miners utilized modern facilities, the combined power consumption would be 166.7 megawatts (1.46 terawatt-hours per year).133
At the end of 2017, the global bitcoin mining activity was estimated to consume between one and four gigawatts of power.205 Politico noted that the even high-end estimates of bitcoin's overall consumption levels amount to only about 6% of the entire power consumed by the global banking industry, and even when bitcoin's consumption levels increased 100 read here fold from the current degrees, bitcoin's consumption would still only amount to about 2% of global electricity consumption.206.
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To lower the expenses, bitcoin miners have put up in places like Iceland where geothermal energy is economical and cooling Arctic air is liberated.207 Bitcoin miners are known to utilize hydroelectric power in Tibet, Quebec, Washington (state), and Austria to reduce electricity prices.206208209210 Miners are drawn to suppliers like Hydro Quebec who have energy surpluses.211 According to a University of Cambridge study, much of bitcoin mining is done in China, where power has been subsidized by the government.212213.
A variety of journalists,207214 economists,215216 and the central bank of Estonia217 have voiced concerns that bitcoin is a Ponzi scheme. In 2013, Eric Posner, a law professor at the University of Chicago, stated that"a true Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion. "218 A 2014 report from the World Bank concluded that bitcoin was not a willful Ponzi scheme.219:7 The Swiss Federal Council220:21 examined the concerns that bitcoin might be a pyramid scheme; it concluded that,"Since in the case of bitcoin the normal promises of profits are lacking, it cannot be presumed that bitcoin is a pyramid scheme." In July 2017, billionaire Howard Marks referred to bitcoin as a pyramid scheme.221.