Thursday, October 4th 2018

Cryptocurrency Trading Bots Manipulating Bitcoin, Altcoins' Pricing

The Wall Street Journal has come forward with a story confirming what we all knew, but could have been left out of the cryptocurrency narrative for various reasons: that bots are used on a daily basis to manipulate pricing of these digital assets. The practice includes various tricks, such as spoofing (creating a hue order in the ledger and then canceling), pump-and-dump schemes (where players can resort to a variety of manipulation techniques to pump um a given product's pricing in order to then dump all their positions at the ballooned price) and ping-pong transactions (where a holder of multiple wallets makes extensive trades between his assets, never moving crypto in or out of his control, but placing extra orders and volume on the markets.

Of course, most of these practices have been outlawed in real-world investment scenarios, as price manipulation doesn't really bode well for a free market. However, some players in the crypto sphere (trader Kjetil Eilersten, who developed the market-manipulation program Quatloo Trader) go as far as defending pricing manipulation tools' implementation, saying that a market where "everybody manipulates" results in a zero-sum loss for anyone. Now isn't that refreshing.
Sources: The WSJ, via CCN
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37 Comments on Cryptocurrency Trading Bots Manipulating Bitcoin, Altcoins' Pricing

#1
Vayra86
You don't say.

Common sense is not common apparently - but this is one of the reasons Bitcoin was and is never going to work and this was clear as day from the very beginning.

This should also serve as the one argument to end them all: non-regulated trade is never going to work out. You cannot rely on algorithms to be able to respond to the ingenuity of greedy people. Every game requires an arbiter.
Posted on Reply
#2
The Quim Reaper
Crypto miners are basically oxygen thieving scumbags then...Gee, you don't say.:rolleyes:
Posted on Reply
#3
Metroid
As long as bots work on this, it will never be a "free market".
Posted on Reply
#5
R-T-B
The Quim Reaper
Crypto miners are basically oxygen thieving scumbags then...Gee, you don't say.:rolleyes:
Miners aren't the ones trading like this, 1%ers with shittons of money to influence the market are, but cool hatred bro.

All this should be managable at the exchange, if they were willing to ban users for this behavior.
Posted on Reply
#6
hat
Enthusiast
Kinda figured as much. In other news, the sky is blue, grass is green, and water is wet.

I believe cryptocurrencies can be legitimately useful, but not like this... not in any large scale, anyway. I'm still mining cause I can, and do expect to make something out of it at some point.
Posted on Reply
#7
Deathmourne
Vayra86
You don't say.

Common sense is not common apparently - but this is one of the reasons Bitcoin was and is never going to work and this was clear as day from the very beginning.

This should also serve as the one argument to end them all: non-regulated trade is never going to work out. You cannot rely on algorithms to be able to respond to the ingenuity of greedy people. Every game requires an arbiter.
I absolutely cant believe how stupid the general population is, do 2 trades and youl notice how the bots buy and sell faster than you.
Posted on Reply
#8
moproblems99
Deathmourne
I absolutely cant believe how stupid the general population is, do 2 trades and youl notice how the bots buy and sell faster than you.
Well damn, I guess I can't buy anything on ebay either.
Posted on Reply
#9
Captain_Tom
Yeah this totally isn't happening in "traditional" markets or "real" assets lol.

Nevermind the fact that the housing crisis was mainly caused by "Government Regulated" agencies giving AAA+ ratings to junk packages. I mean really people...

Metroid
As long as bots work on this, it will never be a "free market".
There are bots trading normal stocks as well genius. In fact the richest hedge funds and investments firms bid insane amounts of money just to get a small office next to the NYE stock exchange - literally so their computers can send data to the exchange the fastest.

That's right, even at the speed of light it matters to be closer. Those extra few seconds make your bot win more often...
Posted on Reply
#10
StrayKAT
No more sophisticated than me in my delinquent stage. Finance is full of low life shit, just presented better.
Posted on Reply
#11
Captain_Tom
StrayKAT
No more sophisticated than me in my delinquent stage. Finance is full of low life shit, just presented better.
It truly is bizarre how little people understand about the existing financial markets.

Moronic "articles" like this one just illustrate that most people know absolutely nothing. There are bots doing everything described here in tradtional stocks lol. Already!
Posted on Reply
#12
StrayKAT
Captain_Tom
It truly is bizarre how little people understand about the existing financial markets.

Moronic "articles" like this one just illustrate that most people know absolutely nothing. There are bots doing everything described here in tradtional stocks lol. Already!
I don't know the details myself, but I tend to assume the worst about the whole industry... Maybe I've watched one too many white collar crime shows.
Posted on Reply
#13
Captain_Tom
StrayKAT
I don't know the details myself, but I tend to assume the worst about the whole industry... Maybe I've watched one too many white collar crime shows.
I would say that it is wrong to assume the worst all the time - most people are good. Don't blame "life isn't fare" or other people for your problems.

But it is also Naive to assume there can't be some manipulation going on in any market - it's always possible. Cover your weaknesses, and there are always improvements we can make to any system.
Posted on Reply
#14
coolernoob
no sruprises here. also in real stock market happens the same though the real market is regulated vs previously well known tricks like these. my problem with this and mining in general is the fact that mining exists only because of this false Bot inflated turnover (volume) and miners feed these Bots. People dont use or need cryptosnot even 1/100 of current market turnover. Basically miners produced shit ton of CO2 just so these Bot owners could get more rich.
Posted on Reply
#15
StrayKAT
Captain_Tom
I would say that it is wrong to assume the worst all the time - most people are good. Don't blame "life isn't fare" or other people for your problems.

But it is also Naive to assume there can't be some manipulation going on in any market - it's always possible. Cover your weaknesses, and there are always improvements we can make to any system.
I'm not personally involved (much), so it's not that I'm complaining of unfairness per se. It's just observation really. Finance usually doesn't attract people with an eye for the whole "system". I think it mostly attracts people seeking personal wealth... and they'll do what they can to remain competitive. This is basically the 2008 banking crisis in a nutshell. Everyone living in a bubble competing on small, personal battlefields, where the wider picture is secondary to them.
Posted on Reply
#16
Captain_Tom
StrayKAT
I'm not personally involved (much), so it's not that I'm complaining of unfairness per se. It's just observation really. Finance usually doesn't attract people with an eye for the whole "system". I think it mostly attracts people seeking personal wealth... and they'll do what they can to remain competitive. This is basically the 2008 banking crisis in a nutshell. Everyone living in a bubble competing on small, personal battlefields, where the wider picture is secondary to them.
Couldn't agree more.
Posted on Reply
#18
StrayKAT
FordGT90Concept
Got no idea why WSJMust be a slow news day.
Heh.. but it isn't really. Drama everywhere atm.
Posted on Reply
#19
Deathmourne
moproblems99
Well damn, I guess I can't buy anything on ebay either.
This comment made me chuckle so hard XD
Posted on Reply
#20
lynx29
R-T-B
Miners aren't the ones trading like this, 1%ers with shittons of money to influence the market are, but cool hatred bro.

All this should be managable at the exchange, if they were willing to ban users for this behavior.
Also, there are 6 billion people in the world, Bitcoin will never die for this reason, there are a lot of sheep in this world who don't keep up with the news.
Posted on Reply
#21
R-T-B
lynx29
Also, there are 6 billion people in the world, Bitcoin will never die for this reason, there are a lot of sheep in this world who don't keep up with the news.
Bitcoin will be die as chief coin soon IMO. There's always a new buzzword.
Posted on Reply
#22
Captain_Tom
R-T-B
Bitcoin will be die as chief coin soon IMO. There's always a new buzzword.
Bitcoin is #1, and that's not gonna change. In fact lately the BS coins have been dying.

Only Bitcoin truly can claim it has "store of value."
Posted on Reply
#23
R-T-B
Captain_Tom
Bitcoin is #1, and that's not gonna change. In fact lately the BS coins have been dying.

Only Bitcoin truly can claim it has "store of value."
I'm speaking far longer term. And it's only a theory. Neither of us can claim certainty.
Posted on Reply
#24
Captain_Tom
R-T-B
I'm speaking far longer term. And it's only a theory. Neither of us can claim certainty.
First of all no other coin can claim better "store of value" without a time machine that makes it become invented before 2008, and I will happily claim certainty for nothing beating it too - and this is why: If Bitcoin died for whatever reason, would you actually store your money in any coin ever again?

Maybe you would use them to move money, but I doubt you would ever consider long term storage. It would be too risky after seeing Bitcoin die.


Yeah, maybe another generation would consider something like it in the future, but I am uninterested in talking about what happens 20 years from now. Everyone who got burned in BTC would likely not touch the stuff for a long time, and everyone's prediction is right if you wait long enough lol.
Posted on Reply
#25
R-T-B
Captain_Tom
If Bitcoin died for whatever reason, would you actually store your money in any coin ever again?
I did not say it was going to die. I said it was going to lose it's #1 status, or rather "die as chief coin."
Posted on Reply
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