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Number go down: the single trade that crashed Bitcoin

davidgerard.co.uk

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Re: Number go down: the single trade that crashed Bitcoin

#31

Post by jacques_chester »

antonvs wrote: post #29
village-idiot wrote: post #6

Earlier quoted context omitted.

The nominal market cap of BTC right now is about $129 billion. A $40m trade represents about 0.03% of the reported market cap. That a trade that small would cause the market to crash by double digit percentage points is absolutely a sign of a thin market. Also, the slow speed of price propagation isn’t a sign that the market is thick, it’s a sign that the market is inefficient.

That's not a relevant percentage. You'd need to look at the amount of Bitcoin that trades regularly. Also, I wasn't saying anything about slow speeds. I was saying that the ability of the market, on a single smaller exchange, to absorb a $40 million trade in 20 minutes is not traditionally what you'd call a thin market.

Suppose for the sake of argument you knew that this wouldn't require blockchain confirmation because it's an exchange trade. And suppose you knew that indexes follow exchanges. And suppose you knew that these exchanges are poorly scrutinised.

To the point that, hmm, you could just trade with yourself to pump or dump the price.

A market composed of yourself and yourself is, by any measure, pretty thin.

Re: Number go down: the single trade that crashed Bitcoin

#32

Post by davidgerard »

jacques_chester wrote: post #31
antonvs wrote: post #29

Earlier quoted context omitted.

That's not a relevant percentage. You'd need to look at the amount of Bitcoin that trades regularly. Also, I wasn't saying anything about slow speeds. I was saying that the ability of the market, on a single smaller exchange, to absorb a $40 million trade in 20 minutes is not traditionally what you'd call a thin market.

Suppose for the sake of argument you knew that this wouldn't require blockchain confirmation because it's an exchange trade. And suppose you knew that indexes follow exchanges. And suppose you knew that these exchanges are poorly scrutinised. To the point that, hmm, you could just trade with yourself to pump or dump the price. A market composed of yourself and yourself is, by any measure, pretty thin.

Now, you might think wash trading is rampant on bitcoin exchanges, but that's because it is.

https://medium.com/@bitfinexed/wash-trading-bitcoin-how-bitf...

Re: Number go down: the single trade that crashed Bitcoin

#33

Post by village-idiot »

logicchains wrote: post #19
village-idiot wrote: post #6

Earlier quoted context omitted.

The nominal market cap of BTC right now is about $129 billion. A $40m trade represents about 0.03% of the reported market cap. That a trade that small would cause the market to crash by double digit percentage points is absolutely a sign of a thin market. Also, the slow speed of price propagation isn’t a sign that the market is thick, it’s a sign that the market is inefficient.

>That a trade that small would cause the market to crash by double digit percentage points is absolutely a sign of a thin market. It was only the market on a single exchange, Bitstamp, which is extremelly illiquid compared to the largest exchanges. The problem was that Bitmex, a much more liquid exchange, bases the settlement price of its popular perpetual Bitcoin swap on an index of just two exchanges, Bitstamp and…

I agree that Bitmex basing its settlement price on two less liquid exchanges is a bad thing. Personally given the number of margin traders being force liquidated, I suspect that BitMEX likes the lack of liquidity.

However, if the issue was only a thin market on Bitstamp, the price fluctuations would have remained localized to Bitstamp and the futures market on Bitmex. But instead the price for bitcoin dropped by about $1k across the board, which to me signals thin markets everywhere.

Re: Number go down: the single trade that crashed Bitcoin

#34

Post by devin »

thelasthuman wrote: post #13
AznHisoka wrote: post #11

“The crypto blogs put forward all sorts of bad reasons — it’s capital flight from China! It’s Bakkt offering Bitcoin futures! It’s Flexa offering retail payments in crypto! It’s Microsoft experimenting with the blockchain! — even though this was really obviously a manipulated push like so many before.“ All reasons for the price to rise or drop are obvious in hindsight. I like to see pundits make these predictions bef…

So figure out when market manipulators are going to act? You'd have to be colluding along side them to know this.

I think you missed the point. All the poster is saying is that these crypto analysis people should actually attempt to predict price moves based on market forces instead of explaining movement in hindsight.

Re: Number go down: the single trade that crashed Bitcoin

#35

Post by codyb »

AznHisoka wrote: post #11

“The crypto blogs put forward all sorts of bad reasons — it’s capital flight from China! It’s Bakkt offering Bitcoin futures! It’s Flexa offering retail payments in crypto! It’s Microsoft experimenting with the blockchain! — even though this was really obviously a manipulated push like so many before.“ All reasons for the price to rise or drop are obvious in hindsight. I like to see pundits make these predictions bef…

I think the author links to a post where they predicted this would happen during the upswing in the first few paragraphs actually.

Re: Number go down: the single trade that crashed Bitcoin

#36

Post by londons_explore »

joering2 wrote: post #10
zaroth wrote: post #7

Actually I’m kinda impressed someone put a market order to sell $30 million Bitcoin and the book filled it then and there. Yeah it moved the price. That’s a pretty big trade for BTC. Would BTC have cleared $30 million in actual trading volume a few years ago? Now the fun part, good luck getting the cash out of the exchange!

Luck has nothing to do with it. Someone who is able to either buy or sell such amount in short period of time is not a first timer; they definitely have access to get that dough converted/moved out of computer systems into their banking account as flawlessly as they sold that $30MM in the first place. Otherwise they would not have done such move at all.

I suspect they are a first timer. There are lots of very rich amateurs in the bitcoin world.

A pro would at a bare minimum split it into a few thousand timed orders.

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