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Clickbait title. The subtitle is probably more accurate: "The series of $1,000 days that brought BTC to a record above $19,600 could have been the work of one

Clickbait title. The subtitle is probably more accurate: "The series of $1,000 days that brought BTC to a record above $19,600 could have been the work of one entity" I'm very skeptical. It is certainly possible that a single entity may have encouraged the rally. But there is no way that a single entity actually moved the markets this much. The amount of cash required would be significant. During this time, there were shops in Korean cities advertising cryptocurrency sales in their store windows. This was not entirely the work of a single whale.

7777fps 7y ago
You're implying a single exchange moving the market needs cash to move it. If the ecosystem has decided one exchange is the lead price, then they manipulate the price without needing the underlying assets. Furthermore, bitcoin is one of the only markets I've seen which rewards "whales" instead of punishing them, because in most markets moving the market you will lose money to slippage. The market price will retract after you bump it. In bitcoin markets if you move out the price no-one is trading the 'fundamentals' so it just stays at the new price. Instead of losing money to slippage you gain money from it. Magic internet money indeed!
- deleted 7y ago
  [deleted]
- wpietri 7y ago
  That's an interesting way to think about it. When you say "no one is trading the fundamentals", is that because of some sort of market flaw? E.g., hard to trade that way? Or because there really are no fundamentals to Bitcoin? By the latter I mean that most tradeable instruments are based in some sort of value external to the trading. Stocks have income streams and assets. Commodities have use value. Currencies have national economies (plus central banks who will defend the price). But I'm having trouble thinking of what a Bitcoin fundamental could be. One might say it's the collective belief its fans, I guess. But given that Coinbase now supports 30 instruments, it seems like the supply of digital currencies is potentially infinite. Which suggests the fundamental value will tend toward zero.
  - ufo 7y ago
    Even if we assumed that bitcoin had fundamentals, they wouldn't matter in the end of the day. There is too much fraud and price manipulation in the system, which prevents any chance of market self-regulation.
    - wpietri 7y ago
      Don't those go hand in hand? It seems to me that fraud and price manipulation are much harder in, say, commodities markets or large-cap stock markets, because people are willing to make big bets on a return to fundamentals. E.g., look at the willingness of people to short stocks that seem overhyped.
- SilasX 7y ago
  >If the ecosystem has decided one exchange is the lead price, then they manipulate the price without needing the underlying assets. Okay, but I think there's a big difference between: A) Some whale committed bottomless resources to keep bidding up an asset whenever it fell in price, leading to a much higher price over six months, vs B) Some whale caused a one-day surge in price of the asset, which got the asset attention, which had numerous cascading effects over the next six months, including greater attention for the asset, which led to a bigger, deeper reserve of demand for it. It feels like a stretch to refer to B) as "one whale causing the entire rally", as there is a more complex network of effects at play.
  - SpicyLemonZest 7y ago
    It’s somewhat of a stretch, for sure. I’d normally expect “one whale caused the rally” to mean that the whale started buying arbitrary amounts of bitcoin at a price near the top of the rally. But I think any other description is more of a stretch. If (B) is correct it’s a speculative bubble, which happened in response to the whale’s activity, and wouldn’t have happened if not for the whale.
    - SilasX 7y ago
      >But I think any other description is more of a stretch. If (B) is correct it’s a speculative bubble, which happened in response to the whale’s activity, and wouldn’t have happened if not for the whale. That's what I dispute. If that one-time spike was enough to set off that kind of activity, then it was probably going to happen eventually, and the whale, at most, hastened it. And yes, it gets kind of tricky, because most of us, including me, are comfortable saying, "This jerk tossing his lit cigarette caused this massive fire", even if the whole place was a tinderbox just waiting to turn into a blaze from anyone's single spark. But the point is, when people write these articles, they're promoting the narrative that this single whale is the major determinant of the price. I dispute that narrative, just as I dispute that one cigarette-jerk's ability to determine how many forest fires there will be.
- jcfrei 7y ago
  > because in most markets moving the market you will lose money to slippage. The market price will retract after you bump it. That's not slippage. Slippage is when you get filled at a higher (or lower) price than you were expecting. Prices moving up when an asset is bought is normal on traditional exchanges as well.
  - wruza 7y ago
    I’ll second that, as there seems to be a strange connection between slippage and fundamentals in GP comment. 7777fps, can you please expand on that a bit more?
    - papln 7y ago
      I think 7777fps just meant that if you buy up an asset with a balance of supply-demand you bid up the price, but then when you try to sell it, you drive the price back down. But with BTC being a speculative asset, since there was already an excess of demand (price increase), and the excitement of the rising prices drives more demand, by buying up coins you drive up the price even further faster. It's a classic pump-and-dump or market-cornering model. The bubble will burst eventually, unless fundamentals grow enough to cover the speculation.
zzzcpan 7y ago
It's possible a single entity was behind massive world wide promotion campaign. But unlikely. More likely many players who had to gain something on speculation all contributed to the campaign on their own.
raducu 7y ago
If by cash you mean Tether tokens, maybe. A bit strange how tether tokens are printed into existence to save the day for the other cryptos.
- uncletammy 7y ago
  > If by cash you mean Tether tokens, maybe. Bingo. For those curious, here is a very thorough history of Tether and how it's use brought chaos to the entire cryptocurrency ecosystem. It was used as a money printer to prop up an insolvent (and criminal) exchange while creating insane volatility in the markets. It is still alive today and continues to be a massive liability for the entire industry. https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
TheHypnotist 7y ago
Perhaps started the rally and lets the media take it from there?
cal97g 7y ago
Sounds like bitfinex to me.
dev_dull 7y ago
Personally I wouldn’t surprised at all. The people working in HFT are some of the smartest in the world, and they have the smarts, tools and the algorithms to smell blood/weakness from thousands of miles away. It only took one or two of these smart people to identify a weakness in the system, and then they raked in I’m sure millions from it.
tempsy 7y ago
The accusation here is that Tether/Bitfinex colluded with the whale to move the price by printing Tethers that weren't actually backed by a dollar 1:1.

7777fps 7y ago

You're implying a single exchange moving the market needs cash to move it. If the ecosystem has decided one exchange is the lead price, then they manipulate the price without needing the underlying assets. Furthermore, bitcoin is one of the only markets I've seen which rewards "whales" instead of punishing them, because in most markets moving the market you will lose money to slippage. The market price will retract after you bump it. In bitcoin markets if you move out the price no-one is trading the 'fundamentals' so it just stays at the new price. Instead of losing money to slippage you gain money from it. Magic internet money indeed!

deleted 7y ago
[deleted]
wpietri 7y ago
That's an interesting way to think about it. When you say "no one is trading the fundamentals", is that because of some sort of market flaw? E.g., hard to trade that way? Or because there really are no fundamentals to Bitcoin? By the latter I mean that most tradeable instruments are based in some sort of value external to the trading. Stocks have income streams and assets. Commodities have use value. Currencies have national economies (plus central banks who will defend the price). But I'm having trouble thinking of what a Bitcoin fundamental could be. One might say it's the collective belief its fans, I guess. But given that Coinbase now supports 30 instruments, it seems like the supply of digital currencies is potentially infinite. Which suggests the fundamental value will tend toward zero.
- ufo 7y ago
  Even if we assumed that bitcoin had fundamentals, they wouldn't matter in the end of the day. There is too much fraud and price manipulation in the system, which prevents any chance of market self-regulation.
  - wpietri 7y ago
    Don't those go hand in hand? It seems to me that fraud and price manipulation are much harder in, say, commodities markets or large-cap stock markets, because people are willing to make big bets on a return to fundamentals. E.g., look at the willingness of people to short stocks that seem overhyped.
SilasX 7y ago
>If the ecosystem has decided one exchange is the lead price, then they manipulate the price without needing the underlying assets. Okay, but I think there's a big difference between: A) Some whale committed bottomless resources to keep bidding up an asset whenever it fell in price, leading to a much higher price over six months, vs B) Some whale caused a one-day surge in price of the asset, which got the asset attention, which had numerous cascading effects over the next six months, including greater attention for the asset, which led to a bigger, deeper reserve of demand for it. It feels like a stretch to refer to B) as "one whale causing the entire rally", as there is a more complex network of effects at play.
- SpicyLemonZest 7y ago
  It’s somewhat of a stretch, for sure. I’d normally expect “one whale caused the rally” to mean that the whale started buying arbitrary amounts of bitcoin at a price near the top of the rally. But I think any other description is more of a stretch. If (B) is correct it’s a speculative bubble, which happened in response to the whale’s activity, and wouldn’t have happened if not for the whale.
  - SilasX 7y ago
    >But I think any other description is more of a stretch. If (B) is correct it’s a speculative bubble, which happened in response to the whale’s activity, and wouldn’t have happened if not for the whale. That's what I dispute. If that one-time spike was enough to set off that kind of activity, then it was probably going to happen eventually, and the whale, at most, hastened it. And yes, it gets kind of tricky, because most of us, including me, are comfortable saying, "This jerk tossing his lit cigarette caused this massive fire", even if the whole place was a tinderbox just waiting to turn into a blaze from anyone's single spark. But the point is, when people write these articles, they're promoting the narrative that this single whale is the major determinant of the price. I dispute that narrative, just as I dispute that one cigarette-jerk's ability to determine how many forest fires there will be.
jcfrei 7y ago
> because in most markets moving the market you will lose money to slippage. The market price will retract after you bump it. That's not slippage. Slippage is when you get filled at a higher (or lower) price than you were expecting. Prices moving up when an asset is bought is normal on traditional exchanges as well.
- wruza 7y ago
  I’ll second that, as there seems to be a strange connection between slippage and fundamentals in GP comment. 7777fps, can you please expand on that a bit more?
  - papln 7y ago
    I think 7777fps just meant that if you buy up an asset with a balance of supply-demand you bid up the price, but then when you try to sell it, you drive the price back down. But with BTC being a speculative asset, since there was already an excess of demand (price increase), and the excitement of the rising prices drives more demand, by buying up coins you drive up the price even further faster. It's a classic pump-and-dump or market-cornering model. The bubble will burst eventually, unless fundamentals grow enough to cover the speculation.

zzzcpan 7y ago

It's possible a single entity was behind massive world wide promotion campaign. But unlikely. More likely many players who had to gain something on speculation all contributed to the campaign on their own.

raducu 7y ago

If by cash you mean Tether tokens, maybe. A bit strange how tether tokens are printed into existence to save the day for the other cryptos.

uncletammy 7y ago
> If by cash you mean Tether tokens, maybe. Bingo. For those curious, here is a very thorough history of Tether and how it's use brought chaos to the entire cryptocurrency ecosystem. It was used as a money printer to prop up an insolvent (and criminal) exchange while creating insane volatility in the markets. It is still alive today and continues to be a massive liability for the entire industry. https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/

TheHypnotist 7y ago

Perhaps started the rally and lets the media take it from there?

cal97g 7y ago

Sounds like bitfinex to me.

dev_dull 7y ago

Personally I wouldn’t surprised at all. The people working in HFT are some of the smartest in the world, and they have the smarts, tools and the algorithms to smell blood/weakness from thousands of miles away. It only took one or two of these smart people to identify a weakness in the system, and then they raked in I’m sure millions from it.

tempsy 7y ago

The accusation here is that Tether/Bitfinex colluded with the whale to move the price by printing Tethers that weren't actually backed by a dollar 1:1.