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Researchers find that one person likely drove Bitcoin from $150 to $1,000

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Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#71

Post by mercer »

agumonkey wrote: post #29
thisisit wrote: post #23

Wow, this paper's conclusion is delayed by 3 years. Willy and Markus bots are old news for anyone who has been following bitcoin closely. The source of all these allegations was this blog appearing in 2014: https://willyreport.wordpress.com/2014/05/25/the-willy-repor...

Any recent manipulations ? especially in 2017 end ?

The Tether 'situation' worries me most. As far as I can tell Kraken is the only exchange that even allows tether to fiat trade, and that's just the first thing about the whole story that worries me.

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#73

Post by ouwen »

simplemath__ wrote: post #24

All crypto markets have always been shallow and rife with manipulation. It's still almost a total free-for-all.

It is a bit nerve racking seeing the distribution of coins to such few addresses: https://bitinfocharts.com/top-100-richest-bitcoin-addresses....

I wonder if there is any collusion among the top 2000 addresses. Mind you one person can even have multiple addresses.

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#74

Post by module0000 »

RickHull wrote: post #53
KasianFranks wrote: post #40

Earlier quoted context omitted.

For example, 10mil shares decided between market makers sitting on both sides of the bid that goes at a price they agree on which is not in the interest of fairness or the public. Another reason for the crypto movement. Source: Me, former hedge fund algo dev

Can you elaborate? Say Alice and Bob are market makers. They are colluding on some target price, say $10k. What's the spread, how does the trading proceed, and what is the effect on fairness and the public?

I'm not the OP to your question, but I observe what you are asking about each day. Here are the steps that can facilitate your example. If you are imagining stocks(instead of futures), replace the word "contract" with the word "share" in the example below.

1) The last trade price is $9950

2) Alice calls Bob, confirming she wants to close 500k long contracts by selling them to Bob

3) Bob bids up the price to $9999

4) Alice says "Ok Bob, let's go", and offers the maximum limit offer quantity at $10,000. This maximum varies by instrument(example 5000)

5) Bob bids 5000 at $10,000, consuming all of Alice's offers

6) This process repeats(very, very quickly) until 500k has been exchanged, or until another participant with size starts knocking out Alice's offers.

Edit: When you see this behavior on the volume profile, it looks like a long horizontal bar that doesn't belong. When you see it live as it happens, it's pretty scary if you have a position open. That's when you realize that you are a rubber life raft, and there are 2 gargantuan oil tankers colliding in the space you occupy.

The other way these happen(in futures at least) are called "upstairs" deals. It's when you want to exchange a quantity of contracts large enough to disturb the market, and the exchange will facilitate the trade to avoid Bob or Alice(accidentally) knocking the market several ticks. I don't know how crypto currencies could have a similar scenario for those deals, but since CME is involved with BTC futures, it might be possible.

Source: me, active futures trader in NQ/ZB/CL land.

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#75

Post by mirimir »

agorabinary wrote: post #49
simplemath__ wrote: post #24

All crypto markets have always been shallow and rife with manipulation. It's still almost a total free-for-all.

And this is completely expected - any market with low volume can be easily manipulated.

Indeed. Prototypically, penny stocks.

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#76

Post by sambe »

The paper is written rather... colloquially. Not necessairly a problem. But it seems mostly concerned with telling the story, and that a huge buyer in the market causes prices to go up. That's not market manipulation.

However, there is also the claim that the buyer did not actually have to pay for the BTC they bought. Well, that's certainly a (very strong!) form of manipulation, but it's not what people traditionally mean when they use the phrase. There is normally an expectation that you have real money and are following exchange procedures, but simply behaving in a way that is frowned upon or considered unfair/detrimental to the reputation of the market. As far as I can tell, people are still worried about traditional manipulation in Bitcoin markets, for things like marking the close. The behaviour described here is more akin to hacking/traditional fraud - it is not zero-sum.

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#77

Post by lallysingh »

gtcode wrote: post #14
KasianFranks wrote: post #5

People do not realize how manipulated the traditional financial markets are otherwise known as Wall Street. Cryptocurrency is less manipulated as it's run by a different culture of people.

It's not technically incorrect to say there is manipulation in the US markets, but comparing bitcoin exchanges to US exchanges is a bit laughable. The US Federal Reserve has (had) what amount(ed) to a printing press, associated with "working groups" a.k.a. PPT. However, major US exchanges themselves, whether stock, futures, etc., are far more regulated and mature compared to a bitcoin exchange. The manipulation to wh…

The crypto markets are pretty close to OTC markets. Any significant flow will shift markets. The only problem, IMHO, is that traditional investors are looking at it.

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#78

Post by AnimalMuppet »

KasianFranks wrote: post #28
gtcode wrote: post #14

Earlier quoted context omitted.

It's not technically incorrect to say there is manipulation in the US markets, but comparing bitcoin exchanges to US exchanges is a bit laughable. The US Federal Reserve has (had) what amount(ed) to a printing press, associated with "working groups" a.k.a. PPT. However, major US exchanges themselves, whether stock, futures, etc., are far more regulated and mature compared to a bitcoin exchange. The manipulation to wh…

Lets talk about QE-1-4, the printing of money and bankers being bailed out. Your argument does not stand by any measure of reason or logic. Lets also talk about investment bankers and VC's who are completely being disrupted.

We know about that. Let's not bother to talk about it; it smells like trying desperately to change the subject. We're talking about how, with all that you said about financial markets, bitcoin is worse. Saying "but the financial markets are manipulated" doesn't refute the claim we're talking about whatsoever.

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#79

Post by Fnoord »

pessimizer wrote: post #58
diab0lic wrote: post #50

Earlier quoted context omitted.

The dot com bubble analogy is fashionable right now because it serves to push the desired narrative without having to deny or provide evidence against what is clearly a bubble. I'd imagine many of the people you see perpetuating this are the same that were denying the bubble a few months ago. However that doesn't necessarily make it wrong -- I'm very skeptical but I'd have a tough time arguing that nothing useful at…

I'd argue that nothing useful is coming of it now, and that during dot com, the internet was extremely useful.

Is that rose tinted glasses / nostalgia though? Do you have a bunch of examples to support your conclusion?

Re: Researchers find that one person likely drove Bitcoin from $150 to $1,000

#80

Post by barbegal »

sambe wrote: post #76

The paper is written rather... colloquially. Not necessairly a problem. But it seems mostly concerned with telling the story, and that a huge buyer in the market causes prices to go up. That's not market manipulation. However, there is also the claim that the buyer did not actually have to pay for the BTC they bought. Well, that's certainly a (very strong!) form of manipulation, but it's not what people traditionally…

I agree, the version of the paper published for the Workshop on the Economics of Information Security http://weis2017.econinfosec.org/wp-content/uploads/sites/3/2... has a large number of small mistakes and the statistical analysis performed is pretty poor and badly explained.

And you're right, it is not really market manipulation, it is blatant fraud by Mark Karpeles and he will almost certainly be found guilty of that charge in Japan. It is strange that the paper makes no mention of his conviction for fraud.

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