4 ms·

The Christmas crypto correction. What really happened

42 points by chejazi 9y ago

MadSudaca 9y ago
Sounds plausible, but he didn't give any evidence.
- geetfun 9y ago
  Although the author didn't give any evidence and just a lot of circumstantial hand waving, the whole idea of market manipulation by the exchanges isn't something new. eg. the stock market In the new year, look for a narrow trading range on a day to day or even week by week basis, with a steady rise in price on relatively low volume. This could possibly be a tell that things are being manipulated upward.
  - the_cat_kittles 9y ago
    back in the "good ol days" of btc-e.com, i feel like the entire point was pump and dump. it should be expected 100% of the time.
jsolson 9y ago
The bit about not being able to cash out over $1k is flat out false. The order book history from GDAX (I maintain a personal level 3 copy) also doesn't suggest market pressure at $12k beyond a lot of opportunists (myself included).
- dsl 9y ago
  Selling bitcoin and cashing out are two different things. The exchanges will happily let you deposit, buy, and sell, but when you want that wire transfer there are magically a bunch of hurdles to jump. BTC market cap is currently $233,616,547,500. The total USD held by reputable exchanges is probably in the low hundreds of millions.
  - jsolson 9y ago
    I transferred in excess of $50k USD out without incident. Could I have done the same with $1M USD? I have no idea. The bar is considerably higher than $1k, though, and I'd wager is considerably higher than most people have to comfortably move around.
    - paulhodge 9y ago
      Yeah I also withdrew 5 figures of cash during the crazy period. I have an old Coinbase account.. I think there are worse delays/limits put on new accounts. For sure, if everyone did a bank run then there would be a liquidity shortage. But saying that is wayyy different than what the article said, that most people couldn't even withdraw $1k.
      - TomVDB 9y ago
        But why would there be a liquidity shortage? It's obvious that this would be the case in a fractional banking system, but assuming that Gemini or Coinbase aren't complete crooks, through which mechanism would they not have enough cash on hand? For each transaction on their exchange, they'd receive money from the buyer and pass that on to the seller?
        jsolson 9y ago
        You can trade BTC/LTC and BTC/ETH as well, though, and all of the cryptocurrencies can move into/out of them at will. There are steps they could take to ensure liquidity in USD, but they're relatively expensive. I, personally, prefer to keep my dollars in dollars and in an FDIC insured account.
    - rewtraw 9y ago
      My Gemini account says I have a $100k daily USD withdrawal limit via ACH, and doesn't note a limit for wire transfers. I haven't needed to max that out yet, but I don't think I would have a problem selling millions of USD worth of BTC/ETH and withdrawing it to my bank account.
  - 9y ago
jchw 9y ago
No sources, vague circumstantial accusations. It makes for a good story, but without more information it's just another theory. Not saying it isn't true, but it's presented as fact without very much real assurance. I don't doubt that there's market manipulation, but I have strong personal doubts it's this nice and tidy. This sounds vaguely like a conspiracy theory at times.
spunker540 9y ago
I’m sure there’s plenty of market manipulation but this is definitely more conspiracy theory than fact. I highly doubt Coinbase as a company was trying to insider trade on Bitcoin Cash with predatory bots to pump the price. They make enough money off all their fees, and they already have more users than Charles Schwab; they’re not some shady exchange based off-shore.
- loopdoend 9y ago
  He never said Coinbase was doing it. It doesn’t matter if Coinbase was involved - it will looks terrible that it was exposed right when they launched.
AznHisoka 9y ago
...Meanwhile another cryptocurrency called Ripple basically jumped up 500% during the past week. I think some people might've been cashing out of Bitcoin and moving to the next big thing.
- teekno 9y ago
  "next big thing" == "next pump 'n' dump"
empath75 9y ago
This is like second rate /r/bitcoinmarkets fanfiction. It’s pure speculation and hand waving. Although I do find it interesting that dumping $200 million worth of tethers into the market didn’t move the price. There is going to be hell to pay whenever the run on tethers starts.
thisisit 9y ago
> Obviously, no human would be flooding the books with orders 3X above the current market value only a minute after release. Whenever such claim is made, I wonder if people in cryptocurrency have heard of the terms - market order, slippage and latency in context of trading.

42 points by chejazi 9y ago

MadSudaca 9y ago

Sounds plausible, but he didn't give any evidence.

geetfun 9y ago
Although the author didn't give any evidence and just a lot of circumstantial hand waving, the whole idea of market manipulation by the exchanges isn't something new. eg. the stock market In the new year, look for a narrow trading range on a day to day or even week by week basis, with a steady rise in price on relatively low volume. This could possibly be a tell that things are being manipulated upward.
- the_cat_kittles 9y ago
  back in the "good ol days" of btc-e.com, i feel like the entire point was pump and dump. it should be expected 100% of the time.

jsolson 9y ago

The bit about not being able to cash out over $1k is flat out false. The order book history from GDAX (I maintain a personal level 3 copy) also doesn't suggest market pressure at $12k beyond a lot of opportunists (myself included).

dsl 9y ago
Selling bitcoin and cashing out are two different things. The exchanges will happily let you deposit, buy, and sell, but when you want that wire transfer there are magically a bunch of hurdles to jump. BTC market cap is currently $233,616,547,500. The total USD held by reputable exchanges is probably in the low hundreds of millions.
- jsolson 9y ago
  I transferred in excess of $50k USD out without incident. Could I have done the same with $1M USD? I have no idea. The bar is considerably higher than $1k, though, and I'd wager is considerably higher than most people have to comfortably move around.
  - paulhodge 9y ago
    Yeah I also withdrew 5 figures of cash during the crazy period. I have an old Coinbase account.. I think there are worse delays/limits put on new accounts. For sure, if everyone did a bank run then there would be a liquidity shortage. But saying that is wayyy different than what the article said, that most people couldn't even withdraw $1k.
    - TomVDB 9y ago
      But why would there be a liquidity shortage? It's obvious that this would be the case in a fractional banking system, but assuming that Gemini or Coinbase aren't complete crooks, through which mechanism would they not have enough cash on hand? For each transaction on their exchange, they'd receive money from the buyer and pass that on to the seller?
      - jsolson 9y ago
        You can trade BTC/LTC and BTC/ETH as well, though, and all of the cryptocurrencies can move into/out of them at will. There are steps they could take to ensure liquidity in USD, but they're relatively expensive. I, personally, prefer to keep my dollars in dollars and in an FDIC insured account.
  - rewtraw 9y ago
    My Gemini account says I have a $100k daily USD withdrawal limit via ACH, and doesn't note a limit for wire transfers. I haven't needed to max that out yet, but I don't think I would have a problem selling millions of USD worth of BTC/ETH and withdrawing it to my bank account.
- 9y ago

jchw 9y ago

No sources, vague circumstantial accusations. It makes for a good story, but without more information it's just another theory. Not saying it isn't true, but it's presented as fact without very much real assurance. I don't doubt that there's market manipulation, but I have strong personal doubts it's this nice and tidy. This sounds vaguely like a conspiracy theory at times.

spunker540 9y ago

I’m sure there’s plenty of market manipulation but this is definitely more conspiracy theory than fact. I highly doubt Coinbase as a company was trying to insider trade on Bitcoin Cash with predatory bots to pump the price. They make enough money off all their fees, and they already have more users than Charles Schwab; they’re not some shady exchange based off-shore.

loopdoend 9y ago
He never said Coinbase was doing it. It doesn’t matter if Coinbase was involved - it will looks terrible that it was exposed right when they launched.

AznHisoka 9y ago

...Meanwhile another cryptocurrency called Ripple basically jumped up 500% during the past week. I think some people might've been cashing out of Bitcoin and moving to the next big thing.

teekno 9y ago
"next big thing" == "next pump 'n' dump"

empath75 9y ago

This is like second rate /r/bitcoinmarkets fanfiction. It’s pure speculation and hand waving. Although I do find it interesting that dumping $200 million worth of tethers into the market didn’t move the price. There is going to be hell to pay whenever the run on tethers starts.

thisisit 9y ago

> Obviously, no human would be flooding the books with orders 3X above the current market value only a minute after release. Whenever such claim is made, I wonder if people in cryptocurrency have heard of the terms - market order, slippage and latency in context of trading.