4 ms·

I don't understand the idea that a whale could move the market and make money off it. To move the market, you need to spend money. The only way it works is if

I don't understand the idea that a whale could move the market and make money off it. To move the market, you need to spend money. The only way it works is if you create some kind of momentum and the market continues to go up. But rational markets will sell into the artificial momentum and the price will be be close to where you started. The net result is that you lost money. I believe there is momentum in markets (they are definitely NOT perfectly rational). But is there enough momentum to really make money with this scheme? I highly doubt it. Also consider that a group of whales would have to work together to do this. Do you really trust your whale friend to buy at the same time you do? What if he front-runs you and you end up buy the bitcoin he just bought last week for 10% lower? I don't buy the theory that there are a group of "whales" sitting around planning how to manipulate markets together.

aaavl2821 9y ago
You are right, it doesn't always work, but it can work, and work really well. The way you make money is by creating volume and momentum. You buy in a low volume market, where it's cheaper to move the market, then if volume takes off and price momentum builds, you can sell much more volume without moving the market. We aren't talking about people liquidating their entire stakes, but you can make a few million here and there easy. There is strong incentive to collude: collusion unlocks the potentially powerful profit engine of market manipulation. You make more money working together than you could on your own. If people try to screw each other too much the whole thing falls apart, as market movements are no longer predictable to the colluders, and their advantage is gone. So yeah collusion can break down in cases but as a rule people understand they make more money together If you don't buy that theory, id recommend reading about Solomon brothers or even watching the wolf of wall st. Martin shkreli did this stuff too. I think it was Jim cramers tactic for a while (talk your book on tv, get retail volume in small cap stocks and sell into that) JP morgan and other early wall st financiers did this sort of stuff. It happens in the real world even now; I've heard from friends at big banks that they know people who will sometimes do stuff like this market manipulation is how people make real money in unregulated markets. cornering the market is and always has been the holy grail for market manipulation and profiting in unregulated markets. It's why regulation exists. Its a theory in the same way that evolution is a theory
- pc86 9y ago
  > We aren't talking about people liquidating their entire stakes, but you can make a few million here and there easy. This is the important part that took me a while to get. This isn't someone with $100 million in BTC selling their entire stock for $150 million. This is someone with $100 million in BTC spending $200k to jumpstart a rise in price and selling off $3 million in the process and ending up with more-or-less $100 million in BTC.
rednerrus 9y ago
You don't think the Bitfinex/Tether cats printing Tether and using it to wash trade BTC is manipulating the price of BTC. I don't think the $19,000 price on Bitfinex yesterday was organic.

aaavl2821 9y ago

You are right, it doesn't always work, but it can work, and work really well. The way you make money is by creating volume and momentum. You buy in a low volume market, where it's cheaper to move the market, then if volume takes off and price momentum builds, you can sell much more volume without moving the market. We aren't talking about people liquidating their entire stakes, but you can make a few million here and there easy. There is strong incentive to collude: collusion unlocks the potentially powerful profit engine of market manipulation. You make more money working together than you could on your own. If people try to screw each other too much the whole thing falls apart, as market movements are no longer predictable to the colluders, and their advantage is gone. So yeah collusion can break down in cases but as a rule people understand they make more money together If you don't buy that theory, id recommend reading about Solomon brothers or even watching the wolf of wall st. Martin shkreli did this stuff too. I think it was Jim cramers tactic for a while (talk your book on tv, get retail volume in small cap stocks and sell into that) JP morgan and other early wall st financiers did this sort of stuff. It happens in the real world even now; I've heard from friends at big banks that they know people who will sometimes do stuff like this market manipulation is how people make real money in unregulated markets. cornering the market is and always has been the holy grail for market manipulation and profiting in unregulated markets. It's why regulation exists. Its a theory in the same way that evolution is a theory

pc86 9y ago
> We aren't talking about people liquidating their entire stakes, but you can make a few million here and there easy. This is the important part that took me a while to get. This isn't someone with $100 million in BTC selling their entire stock for $150 million. This is someone with $100 million in BTC spending $200k to jumpstart a rise in price and selling off $3 million in the process and ending up with more-or-less $100 million in BTC.

rednerrus 9y ago

You don't think the Bitfinex/Tether cats printing Tether and using it to wash trade BTC is manipulating the price of BTC. I don't think the $19,000 price on Bitfinex yesterday was organic.