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An anatomy of Bitcoin price manipulation

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Re: An anatomy of Bitcoin price manipulation

#361

Post by kikimora »

VHRanger wrote: post #125
evrydayhustling wrote: post #101

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 c…

Author here. I considered this, but rejected most of those hypotheses. > Retail and futures traders create instability by placing leveraged trades and stop orders that amplify swings. True > 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. Algorithmic traders, yes. Market makers absolutely not. MMs want to be there as much as…

Market makers likely know how thing works and react to a volatility spike. I wonder what was the traded volume during the event and how it matches normal order book disposition. If only retail orders left in the boom then there will be very low volume. If there were pre-planted orders from the manipulator then all liquidations should hit them. Remaining orders should disappear shortly after the event, as soon as liquidations complete.

Re: An anatomy of Bitcoin price manipulation

#362

Post by SgtBastard »

sjtindell wrote: post #326
jayd16 wrote: post #228

Earlier quoted context omitted.

Isn't a casino with no addicts just an arcade? I'm not sure what your point is, though. The addicts are pretty inextricable.

Perhaps let's just talk running a poker table. It's a platform where people can play a zero sum game against each other. To me, that's what cryptocurrency is. People want to play these games. That, to me, is real value.

Nitpick: the House rake makes poker not zero sum amongst players.

Re: An anatomy of Bitcoin price manipulation

#363

Post by miracle2k »

fleddr wrote: post #65
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.

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…

You would be correct. The wash-trade yourself to popularity thing is frankly a flight of fancy that is a symptom of the larger poverty of the sceptic argument.

Sure you can identify some self-trading: to farm some new upstart marketplace airdrop, or maybe its a dev experimenting, or maybe someone is doing say a flashloan for fun and attention. But show us a collection or artist who "made" it using this strategy, I'll be waiting.

Rather than setting up a web of fake wallets, spending lots of money on gas, then getting almost certainly be caught (how much wash trading and realistic-looking wallet activity do you have to generate to sell out a 10k item collection?!), you can instead pay some crypto influencers to shill your project, or mint.

The reality is: reputation in this space is everything.

Re: An anatomy of Bitcoin price manipulation

#364

Post by mcguire »

beloch wrote: post #308
ckastner wrote: post #136

Earlier quoted context omitted.

> People who haven't worked in financial markets have a hard time appreciating how deep the muck can get. That's the main reason why I find the battle cry of "decentralization" so comically ironic. No government can control crypto, how awesome and empowering! When the truth is that the vast amount of control that we've seen develop in the past century (and especially in the past two decades) were just to protect peop…

When half of the people responsible for regulating markets are, instead, using insider knowledge to make a killing at day-trading, it's hard to trust the system. So, the natural response is to build a new system that can be made to dance on strings by people you don't even know the identities of. It doesn't exactly seem like progress, does it?

You are assuming the two systems are equivalent.

Re: An anatomy of Bitcoin price manipulation

#365

Post by mcguire »

SgtBastard wrote: post #362
sjtindell wrote: post #326

Earlier quoted context omitted.

Perhaps let's just talk running a poker table. It's a platform where people can play a zero sum game against each other. To me, that's what cryptocurrency is. People want to play these games. That, to me, is real value.

Nitpick: the House rake makes poker not zero sum amongst players.

What's the house rake in cryptocurrency?

Re: An anatomy of Bitcoin price manipulation

#366

Post by mcguire »

heavyset_go wrote: post #353
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…

> But Ben, US equities have intrinsic value unlike this BTC garbage! Well unless they pay no dividend, have dual-class share structure, and IPO without a profitable quarter. Should the company's assets be liquidated, shareholders are entitled to that value after creditors. If BTC tanks, there is little value to extract from liquidation.

How much of a bath would you take on one share's portion of the assets? Oh, and how many of those assets are tangible?

Re: An anatomy of Bitcoin price manipulation

#367

Post by mcguire »

eric_cc wrote: post #192
alecst wrote: post #113

Earlier quoted context omitted.

A counterpoint would be that what some call the intrinsic value is the expected future share price based on expected future revenues. There might or might not be future revenue for SNAP, but there is no revenue for a digital currency. But I do think digital currency has intrinsic value, in that for now, it affords you anonymity to commit crimes in a way that ordinary currency does not. I’m not happy about it, but thi…

> it affords you anonymity What? Bitcoin is radically transparent. The vast majority of crimes are committed with standard currencies like $USD. If 'crime' is the only value you see, you're extremely ignorant. What is the bull case for $USD? What properties does it have that make it superior to currencies like $BTC in your opinion?

"What is the bull case for $USD?"

Is Bitcoin a currency or an "investment"? (Here's a hint: you don't want a "bull case" for a currency.)

Re: An anatomy of Bitcoin price manipulation

#368

Post by somewhereoutth »

errantmind wrote: post #360
somewhereoutth wrote: post #355

Earlier quoted context omitted.

I think we can ascribe an inherent value - as opposed to market price. When the inherent value is clearly and indisputably zero, but punters are handing over real cash, then you have a fraudulent scheme.

You have provided no definition of this 'inherent value' you claim to exist. You keep stating conclusions in absolute terms with nothing to back it up.

For example gold can be used to make jewellery etc. USD can be used to pay taxes. Shares might yield a dividend. Any physical object could have some use. Crypto has nothing.

The 'market' is not the be all and end all!

I suppose that as crypto maintains a record of transactions, and in so far as we can tie crypto wallets to real individuals, it might be possible to unwind all the transactions and pay reparations to the victims.

Re: An anatomy of Bitcoin price manipulation

#369

Post by smoldesu »

dadoge wrote: post #87
paulpauper wrote: post #80

Earlier quoted context omitted.

someone could have said the same about Enron in 2001 too

Enron was run by a corrupt CEO who lied about its accounting. Bitcoin has no CEO or accountants. It has also gone up A LOT more than Enron did over a much longer timespan. How can you look at the log chart and think BTC is “going to zero”?

> How can you look at the log chart and think BTC is “going to zero”?

Because eventually it will be worthless. Your return on investment is entirely predicated by how much demand there is for Bitcoin; currently it's pretty high, correlating with media attention and whatnot. This is just about the highest demand we'll see for it though, the future of all crypto obviously hinges on practical applications, which venture capitalists with unlimited resources have struggled to define.

HODL what you please, but I'd really like to hear the logic behind how people think that Bitcoin can survive an inevitable crash.

Re: An anatomy of Bitcoin price manipulation

#370

Post by mcguire »

Tenoke wrote: post #209
cillian64 wrote: post #137

Earlier quoted context omitted.

I think of it like this. If you suddenly owned 100% of Bitcoin, then you wouldn’t actually have anything valuable - nobody would buy it off you. If you suddenly owned 100% of Tesla then you’d be able to extract a lot of value.

If I suddenly own 100% of Tesla the stock would crash. I'll extract some value but it would be a pittance.

"If I suddenly own 100% of Tesla the stock would crash."

This is a nonsensical statement. If you own 100% of Tesla then it has no stock price.

You would also have control of its physical and intellectual assets as well as receiving its current and future revenue streams.

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