# Bitcoin Price Manipulation: How Two Trading Bots Fueled the 2013 Price Spike Cite as: Gorak, R. (2026). Bitcoin Price Manipulation: How Two Trading Bots Fueled the 2013 Price Spike. Tradicted. https://www.tradicted.com/research/gandal-bitcoin-2018/ Paper: Neil Gandal and JT Hamrick and Tyler Moore and Tali Oberman — *Price Manipulation in the Bitcoin Ecosystem* Published in: Journal of Monetary Economics (2018) Original: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2977479 Key finding: The USD-BTC exchange rate rose by an average of four percent on days when suspicious trades took place at Mt. Gox in 2013, compared to a slight decline on days without suspicious activity. --- Price manipulation occurs when traders artificially inflate an asset's price through coordinated or fraudulent buying rather than genuine demand. Gandal, Hamrick, Moore, and Oberman's 2018 paper "Price Manipulation in the Bitcoin Ecosystem" examines suspicious trading by two automated Mt. Gox accounts, Markus and Willy. The study finds USD-BTC returns rose four to five percent on suspicious-activity days, based on approximately 18 million Mt. Gox transactions from 2011 to 2013. The suspicious activity coincided with a price run-up from around $150 to over $1,000 in two months in late 2013. ## What the Study Found On the 82 days with suspicious purchasing activity, the USD/BTC exchange rate rose 79% of the time, versus 55% on days without suspicious activity. The Markus bot acquired 335,898 bitcoins worth around $76 million over 33 of 225 active days in 2013. The Willy bot acquired 268,132 bitcoin nominally worth around $112 million over 50 of 65 active days. A regression controlling for DDoS attacks found Willy's activity raised the Mt. Gox rate by $21.65 per day, significant at p < 0.001. Willy's activity was linked to daily percentage returns 4.1 to 4.7 percent higher across all four exchanges, significant at the 99% confidence level. ## Methodology The study uses the leaked Mt. Gox transaction data dump, which links trades to individual user accounts. The dataset contains approximately 18 million matching buy and sell transactions. The data span April 2011 to November 2013, with suspicious activity identified from February to November 2013. Regressions control for DDoS attacks on Mt. Gox, the day after a DDoS attack, and other non-DDoS security incidents. ## Key Statistics | Metric | Finding | Context | |---|---|---| | Price rise frequency, days with suspicious activity | 79% | vs. 55% on days without suspicious activity | | Willy coefficient, Mt. Gox rate-change regression | $21.65/day | RateChange = β0 + β1Markus + β2Willy + β3DDoS + β4DayAfterDDoS + β5Other + ε, significant at p < 0.001 | | Willy coefficient, percentage-return regression | 4.1–4.7% | Returns = β0 + β1Markus + β2Willy + β3DDoS + β4DayAfterDDoS + β5Other + ε, across all four exchanges | | Bitcoins acquired by Markus and Willy combined | ~600,000 BTC | by November 2013, valued at $188 million | | USD/BTC exchange rate spike | $150 → over $1,000 | two-month period in late 2013 | ## Why This Matters Thinly traded cryptocurrency markets remain vulnerable to price manipulation by a small number of accounts. Investors and analysts evaluating cryptocurrency price movements should consider whether trading volume spikes reflect genuine demand or coordinated buying. The volume-spike pattern identified in the Mt. Gox case has recurred across other low-liquidity cryptocurrencies with small market capitalizations. Regulators and exchanges have an incentive to monitor unusual account-level trading patterns rather than relying on aggregate volume as a sign of market health. ## FAQ ### What is price manipulation in the Bitcoin market? Four to five percent was the average daily USD/BTC exchange rate increase on days when the Markus and Willy bots were active on Mt. Gox in 2013, versus a flat or declining rate otherwise. Gandal et al. (2018) conclude the suspicious trading likely caused the exchange rate to spike from around $150 to over $1,000 within two months. ### How much of Mt. Gox's daily trading volume did the suspicious bots represent? 21 percent of Mt. Gox's daily trading volume came from the Markus bot on its active days. The Willy bot accounted for 18 percent of Mt. Gox's daily volume on its active days. Combined, Markus and Willy represented 12 percent and 6 percent, respectively, of trading volume across all four major bitcoin exchanges. ### Is price manipulation still possible in cryptocurrency markets today? 304 of the 308 cryptocurrencies with market capitalizations between $1 million and $100 million recorded at least one 150 percent volume spike. In total, 19,212 such volume-spike events occurred across the sample. On days with a spike, average price increases reached 26.8 percent, compared with 8.6 percent on days without one. Price manipulation remains quite feasible in cryptocurrency markets today. ### What percentage of days did Bitcoin prices rise when suspicious trading occurred at Mt. Gox? 79 percent of the 82 days with suspicious purchasing activity saw the USD/BTC exchange rate rise on Mt. Gox, compared with 55 percent of days without such activity. A chi-squared test found this difference statistically significant at p < 0.05, ruling out random chance as the likely explanation. ## Source Gandal, N., Hamrick, J. T., Moore, T., & Oberman, T. (2018). Price Manipulation in the Bitcoin Ecosystem. Journal of Monetary Economics. [Read the full paper →](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2977479)