5 ms·
"nobody has inside info" It is not known who are making all the trades, wouldn't it be possible that a small group of large bit-coin holders are simply trading
by cstrat 13y ago
"nobody has inside info"
It is not known who are making all the trades, wouldn't it be possible that a small group of large bit-coin holders are simply trading between each other in an effort to inflate the price... they have nothing to lose.
- olefoo 13y agoBTC to BTC transactions don't affect the exchange rate. The exchange rate between BTC and USD is only affected by trades between the two currencies. Now the relative illiquidity of some of the major exchanges ( mtgox especially ) and the fact that it's relatively difficult to find counterparties definitely contributes to the volatility.
- cstrat 13y agoWhat I was alluding to was if you and I both held 100,000 BTC for example, and we wanted to push up the value of BTC so facilitate a sell off in the future... because of our large holding it shouldn't be too hard for us to accept a loss while we buy/sell large quantities as long as we push the price up higher. If we were colluding to push the price up, we could both coordinate large buy/sell orders and dump them into the market adding volume and shifting the price a bit... people watching just see trades and see the price moving, thinking its credible trades... I could be wrong, but if market buy orders take the lowest offered, and market sell orders take the highest offered I think it would work as I imagine. This means those two parties now have a bunch of cash on hand and still hold a lot of BTC, they could now set a bot to continually put buy orders in at an escalating exchange rate. Also sell at an escalating exchange rate. Every now and then execute a large trade to push some volume into the market... it wouldn't work for every trade as normal people would jump in and buy or sell and take their cash/BTC... but on a long enough scale I think it would work.
- xorblurb 13y ago> they have nothing to lose the trading fees ?
- wmf 13y agoI don't think BitStamp or MtGox allow such dark trades. When you put an offer on those exchanges it may match anything on the book. Basically if you want to push the price up you have to make that price available to the masses.
- foobarqux 13y agoTrade inside the spread.