U.S Launches Investigation into Bitcoin Price Manipulation
Well this is actually welcome news and about time something like this happened. I have written before about bitcoin price and how the centralized exchanges can be dishonest and risky. In this particular case the U.S Department of Justice has opened a criminal case according to Bloomberg (https://www.bloomberg.com/news/articles/2018-05-24/bitcoin-manipulation-is-said-to-be-focus-of-u-s-criminal-probe)
They say the criminal investigation is looking into illegal practices that can influence the prices of Bitcoin by traders. They are looking into whether traders are manipulating prices by collusion, spoofing etc. Well I think the issue is not with traders but with exchanges. The exchanges are the guardians or gatekeepers. None of them are truly audited for activity and many exhibit potentially unethical behavior in the way they handle orders, front run clients, practice price manipulation and allow traders to do unethical activity as long as its profitable for them. Crypto exchanges make huge profits and it is in their interest to have huge trade volumes and the price of bitcoin swing wildly. It would not be uncommon to find that collaboration occurs between exchanges as some share order books and liquidity.
The answer is quite simple as to whether traders and exchanges are conducting illegal activity and the answer is YES. The behavior that exchanges and large traders practice would not be acceptable in the Forex or securities market. As I speak bitcoin is trading 5% down. Oh and its no coincidence that bitcoin is trading down over last few days ahead of tomorrow (May 25th) bitcoin futures expiry:
http://www.cmegroup.com/trading/equity-index/us-index/bitcoin_product_calendar_futures.html
This whole manipulation stinks and is out of control :-(
Lets hope Bitcoin trading activity can be cleaned up now and we don't have to watch the thousandth YouTube video on how Bitcoin price is being manipulated when we all already know this is true :-)
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It seems to be the case if you study the charts that algo traders inflate prices very quickly especially with the lower and medium cap altcoins. I am sure those that those that take notice have seen 800% gains in the matter of hours with some of these coins and tokens.
Suck in the those with fomo and then sell at or near the top. Rinse and repeat. There must literally be hundreds of thousands of trade bots in action and probably many thousands just trading between each other.
How is any investigation going to be broad enough to investigate these tactics and do anything about them. Given that fake orders, spoofing, and collusion also affect equity markets despite the best efforts of authorities to crack down, it seemingly cannot be completely eliminated. It seems a tall order indeed.
So yes I totally agree, start with the exchanges. They have the sheer buying power and the most ability to move the higher market cap coins and tokens through collusion or other means. And may be a less lofty and a more achievable goal than going after traders.
Very well written. You get my upvote.
Thank you.
Great
You are correct about the fact that crypto is manipulated.
However currencies with true value like Steem are bucking that trend and will continue to do so.
I use a few different crypto's in day to day life. I have invested long term in coins and tokens that i see as having a future. Not many crypto's fill this criteria. Some are just currencies for currencies sake!
I will only buy a token or coin now if the token itself adds something of value that fiat can't or doesn't..
I think there are a lot of problems that are going to hit exchanges. Tether and crypto's like it that are pegged to the dollar will be a problem. This is something that is being hidden from scrutiny. Exchanges say they have the dollar backing from banks but have not had an audit. The volume of these currencies can often exceed the market cap. They are just "printed" into existence..
I am steering clear of those types of crypto's. When the bitcoin and crypto market drops these tokens become the "safe haven" of investors. What will happen if they crash now? When people have put their wealth there to weather the storm??
Without these fake "crypto's" maybe people would use a self supporting crypto like Steem!!
Thank you for a great article, i've followed you..
Steemon!!!