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An anatomy of Bitcoin price manipulation

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Re: An anatomy of Bitcoin price manipulation

#101

Post by evrydayhustling »

This is some interesting analysis, but all of the causal language is unsupported -- and I think mostly inverted from the reality. Here is an equally supported description:

- Retail and futures traders create instability by placing leveraged trades and stop orders that amplify swings.

- Market makers are aware of instability and design their bots to turn off so that they don't end up on the wrong side of a liquidity cascade.

- People with large orders often cancel them in order to improve their orders when chasing the price. (This happens in non crypto markets too, but some of those markets have incentives and regulation to force market makers to provide stabilizing liquidity.)

The most explicit manipulation is the news outlets designed to amplify positive news. But even that can be explained by desire for clicks as much as short term market shifts.

Re: An anatomy of Bitcoin price manipulation

#103

Post by keymone »

mwattsun wrote: post #5

I'm suspicious of Bitcoin as a store of value. Some seem to think that because there is a fixed amount of Bitcoin it will automatically rise in price as demand confronts scarcity, but that assumes there will continued demand. Elon Musk says Dogecoin is better because it has some inflation built in, encouraging people to spend instead of hoard, but adds "I'm not saying that it's the ideal system for a currency" "Elon…

> So like having a small block size or whatever it is, and a long synchronization time made sense in 2008, but, 2021, or fast forward 10 years, it's like, comically low.

just shows how hopelessly moronic he is on this issue and how surface-level his understanding of what is valuable about bitcoin is.

Re: An anatomy of Bitcoin price manipulation

#104

Post by SilasX »

mbesto wrote: post #100
SilasX wrote: post #76

Earlier quoted context omitted.

>First, let's start by using a valid comparable. Fiat currency has the feature of "medium of exchange", at present BTC does not (technically it does but its adoption for exchange is abysmal). You're changing the topic. You asked whether BTC was being manipulated, and were asked to compare to the US dollar. Whether the dollar is as "medium of exchange" has no bearing on that, you're just unhelpfully switching to an un…

> and were asked to compare to the US dollar. The original blog article was about the BTC/USD market being manipulated; hence the title "Bitcoin price", in which "price" assumes you are converting one currency to another (in this case USD/BTC). The person that replied to me asked "so what, every coin is being manipulated". If anything the replier was changing the topic. The assertion that the coin itself is being man…

You're claiming the dollar can't be manipulated and/or no one is allowed to care about it, because one agency doesn't have jurisdiction over said manipulation?

Re: An anatomy of Bitcoin price manipulation

#105

Post by snowwrestler »

TrackerFF wrote: post #90
skilled wrote: post #31

Interesting tidbit: "An aside on NFTs Because they’re “unique” objects, NFTs are a perfect vehicle for wash trading. You can easily ensure you only wash trade to yourself. The common scheme is to wash trade with yourself until some credible dunce buys the NFT from you at your manufactured “fair” value, leaving you to walk away with real money." It's such a stupidly simple idea it's actually brilliant.

Yes, it's been painfully obvious from the start. It was the first thing I noticed, once looking into NFTs. I'd be surprised, AMAZED actually, if some of the big NFT collections aren't entrenched in wash trading, to pump up trade volume and price. In fact, I think that in order to successfully launch a NFT collection today, you need to have either: A) Substantial social capital. B) Capital to do the wash trading, or i…

You can buy social capital by wash trading the price of the NFTs up to where they are interesting, then giving some to folks with social capital.

Only you don’t give them an actual NFT, you give them a sponsor fee that they use to buy one of your NFTs (thereby further validating the interesting price).

Re: An anatomy of Bitcoin price manipulation

#106

Post by fleddr »

spoiler wrote: post #88
fleddr wrote: post #65

Earlier quoted context omitted.

It's brilliant but not simple at all. You can't just mint an NFT, wash trade it up to a large number and then expect somebody to buy it. This plan would almost always fail. Because it would pop out of nowhere and nobody has ever heard of you. So just like in the traditional art world, you need to be visible and networked. It's very educational to simply browse the big marketplaces. You'll notice that the typical NFT…

> Because it would pop out of nowhere and nobody has ever heard of you. Isn't that everything in the crypto space right now? > So just like in the traditional art world, you need to be visible and networked. People who spend hundreds, if not thousands, on procgen chimpanzee/monkey avatar NFTs would beg to differ.

I mean known in the crypto community. Surely a random person in the street has never heard of most crypto celebrities, but that wasn't my point.

The monkey NFTs that you mention are a perfect example, because they are the best known project after cryptopunks. Massive media reach, real world celebrities and almost all crypto influencers are in.

That's what I mean when I say they didn't come out of nowhere. These high value NFT projects come from massive marketing machines to create the hype. You as rando can't just draw something and sell your NFT for a million, it doesn't work that way.

Re: An anatomy of Bitcoin price manipulation

#107

Post by cuteboy19 »

dadoge wrote: post #91
epinephrinios wrote: post #70

Earlier quoted context omitted.

It's "down, down, down" only if you entered at a very high price: https://athcoinindex.com/coin/bitcoin As the great Andreas Antonopoulos said, everyone gets the Bitcoin price they deserve.

Slight correction: It’s down down down if you entered at a high price AND sold within 3yrs No one who held BTC for 3-4 yrs straight has lost money on their investment throughout the entire history of BTC There will be a point in time where this won’t be true anymore, but I think we are far from it

70% of people who bought Bitcoin bought it in the past year. With these statistics, it is very likely that more people lost money through Bitcoin than gained it.

Someone has to pay for all the Bitcoin mining around the world, so it's probable that Bitcoin as a whole is net negative. That is, the average investor loses money on Bitcoin.

Re: An anatomy of Bitcoin price manipulation

#108

Post by dheera »

benreesman wrote: post #94

Eh 20-ish years ago the shit happening on Island and Archipelago would blow most people’s minds. Undocumented, conditional, non-displayed order types. Routine wash trading. Shear-but-don’t skin multi-venue arbitrage. The ECNs were the Wild West. Smoke-filled dark pools. Island and Arca are NASDAQ and NYSE now. But Ben, US equities have intrinsic value unlike this BTC garbage! Well unless they pay no dividend, have du…

> US equities have intrinsic value

Really? My impression is that many US equities in 2022 are more like Reddit up/downvote scores than a reflection of intrinsic value.

Which isn't a bad thing in my opinion, by the way.

Re: An anatomy of Bitcoin price manipulation

#109

Post by mbesto »

ptero wrote: post #74
mbesto wrote: post #9

Curious - does anyone not think Bitcoin or any other cypto coin is being manipulated?

Depends on what you mean by the manipulation. Many stock, future, precious metal prices are affected by actors who want to temporarily move it for profit. Some are illegal, some perfectly legal. In what way do you expect Bitcoin to be different? This is a technical question, once you define it one could debate if this particular behavior is present in BTC.

> Depends on what you mean by the manipulation.

Fair point. I'll use the SEC's definition: "transactions which create an artificial price or maintain an artificial price for a tradable security". What the author described is exactly this.

> Some are illegal, some perfectly legal.

Agree. My point is probably more about the ease of manipulation when you have a completely deregulated environment.

Re: An anatomy of Bitcoin price manipulation

#110

Post by dadoge »

cuteboy19 wrote: post #107
dadoge wrote: post #91

Earlier quoted context omitted.

Slight correction: It’s down down down if you entered at a high price AND sold within 3yrs No one who held BTC for 3-4 yrs straight has lost money on their investment throughout the entire history of BTC There will be a point in time where this won’t be true anymore, but I think we are far from it

70% of people who bought Bitcoin bought it in the past year. With these statistics, it is very likely that more people lost money through Bitcoin than gained it. Someone has to pay for all the Bitcoin mining around the world, so it's probable that Bitcoin as a whole is net negative. That is, the average investor loses money on Bitcoin.

What about anyone who fully understood its value proposition and held for a 3-4 yr timeframe?

EDIT: let’s check back in in 1-3 yrs here and see if people who bought last year and held are doing :-)

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