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The self-regulatory organization FINRA and the North American Securities Administrators Association have both issued investor alerts about bitcoin.177178
An official investigation into bitcoin traders 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 possibly other countries are being investigated. Brett Redfearn, head of the U.S.
The U.S. national investigation was prompted 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 the exchanges refused to supply it and later provided only limited information.
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Academic research published in the Journal of Monetary Economics concluded that price manipulation occurred during the Mt Gox bitcoin theft and that the market remains vulnerable to manipulation.186 The history of hacks, fraud and theft involving bitcoin dates back to at least 2011.187
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Research by John M. Griffin and Amin Shams in 2018 indicates that trading related to increases in the amount of the Tether cryptocurrency and related trading in the Bitfinex exchange account for roughly half of the price increase in bitcoin in overdue 2017.188189
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The Economist wrote in 2015 these criticisms are unfair, predominantly since the unethical image may compel users to overlook the capacities of their blockchain technology, but also on account of the fact that the volatility of bitcoin is changing in time.194
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 that the"mother of all bubbles. "199 Central bankers, including former Federal Reserve Chairman Alan Greenspan,200 investors like Warren Buffett,201202 and George Soros203 see it here have stated similar opinions, as have business executives like Jamie Dimon and Jack Ma.204.
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 electricity consumption would be 166.7 megawatts (1.46 terawatt-hours per year).133
At the end of 2017, the worldwide bitcoin mining activity has been 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 total energy consumed by the international banking industry, and even when bitcoin's consumption levels increased 100 fold from the current levels, bitcoin's consumption would still only amount to approximately 2% of international power consumption.206.
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To lower the costs, bitcoin miners have set up in places like Iceland where geothermal energy is cheap and cooling Arctic air is free.207 Bitcoin miners are known to utilize hydroelectric power in Tibet, Quebec, Washington (state), and Austria to decrease electricity prices.206208209210 Miners are drawn to suppliers like Hydro Quebec that have energy surpluses.211 According to a University of Cambridge study, a lot of bitcoin mining is done in China, where electricity has been subsidized by the government.212213.
A variety of journalists,207214 economists,215216 and the central bank of Estonia217 have voiced concerns which bitcoin is a Ponzi scheme. In 2013, Eric Posner, a law professor at the University of Chicago, said that"a true Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion. "218 A 2014 report by the World Bank concluded that bitcoin was not a deliberate 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 guarantees of gains 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.