Bitcoin (BTC-USD) and other cryptocurrencies are plunging on Wednesday after new research suggests that the leading cryptocurrency's price may have been manipulated while it was making its parabolic run to nearly $20,000 in late 2017. Here's a rundown of today's cryptocurrency price action, the report's findings, and why it's scaring investors.

Today's cryptocurrency prices

As of 1:30 p.m. EDT, bitcoin was trading for less than $6,300 for the first time since it briefly dipped below that level four months ago. And other leading cryptocurrencies are faring much worse -- in fact, on a percentage basis, bitcoin is the best performer out of the 10 largest cryptocurrencies.

Stacks of gold coins with bitcoin symbols.

Image source: Getty Images.

Here's a look at the 10 largest cryptocurrencies by market capitalization, and how much each has changed over the past 24 hours.

Cryptocurrency Name (Symbol)

Price in U.S. Dollars

Day's Change

Bitcoin (BTC)



Ethereum (ETH)



Ripple (XRP)



Bitcoin Cash (BCH)






Litecoin (LTC)



Cardano (ADA)



Stellar (XLM)









Data source: Prices and daily changes as of June 13, 2018, at approximately 1:30 p.m. EDT, and prices are rounded to the nearest cent where appropriate.

Tether was used to prop up bitcoin prices

According to a paper authored by University of Texas professors John M. Griffin and Amin Shams, digital currency Tether, which is the 11th-largest cryptocurrency by market cap, was used to influence the prices of bitcoin and other top cryptocurrencies during the 2017 cryptocurrency boom.

If you aren't familiar, Tether is a cryptocurrency issued by the Bitfinex exchange that is backed by and pegged to the U.S. dollar. In other words, one Tether coin is, by definition, worth $1.00 at all times. Therefore, Tether is often used as an intermediary to trade between cryptocurrencies -- it allows traders to keep essentially keep some of their funds in U.S. dollars within their cryptocurrency trading accounts.

What the paper found was that there is a very high likelihood that Tether was used, exclusively on the Bitfinex cryptocurrency exchange, to boost prices of bitcoin and other cryptocurrencies when they fell on other exchanges.

According to the paper's abstract, "Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies."

In other words, this doesn't look like a coincidence. As the study puts it, "These patterns cannot be explained by investor demand." And if you're curious, the "other top cryptocurrencies" the abstract is referring to are Dash, Ethereum Classic, Ethereum, Litecoin, Monero, and Zcash. This explains why alt-coins are getting hit even harder than bitcoin: The research found even more manipulation with them.

This could lead to more regulatory scrutiny for cryptocurrencies

While manipulation all by itself is bad enough, it is also likely to trigger additional regulatory scrutiny from various agencies all over the world. Regulatory uncertainty has been a big driver of cryptocurrency volatility in the past, so it's understandable that cryptocurrency investors are on edge after today's report.