Bitcoin: no angel investors, only Faustian bargains

The Something Awful Forums > Main > General Bullshit > Bitcoin: no angel investors, only Faustian bargains

Three Olives: Apr 10, 2005; Not a single fucking olive in sight

CNBCV posted:

Majority of bitcoin trading is a hoax, new study finds

Ninety five percent of spot bitcoin trading volume is faked by unregulated exchanges, according to a study from Bitwise this week.

The firm analyzed the top 81 crypto exchanges by volume on industry site CoinMarketCap.com. They report an aggregated $6 billion in average daily bitcoin volume.
The study finds that only $273 million of that is legitimate.
�People looked at cryptocurrency and said this market is a mess, that�s because they were looking at data that was manipulated,� says Matthew Hougan, global head of research at Bitwise.

New research is casting even more doubt on the legitimacy of bitcoin trading.

An analysis published by Bitwise this week shows that 95 percent of bitcoin spot trading is faked by unregulated exchanges. The survey, first reported by The Wall Street Journal, echoes concerns by regulators that cryptocurrency markets are still ripe for manipulation.

Bitwise, an asset manager in the process of trying to list the first-ever bitcoin exchange traded fund, said it met with the Securities and Exchange Commission on Tuesday to discuss its application. As a part of the process, it submitted analysis that could help regulators cut through the noise.

�People looked at cryptocurrency and said this market is a mess, that�s because they were looking at data that was manipulated,� said Matthew Hougan, global head of research at Bitwise. �When you cut away the echo chamber of these nonsense numbers, it should be an efficient, well-arbitraged market.�

The analysis showed that �substantially all of the volume� reported on 71 out of the 81 exchanges was wash trading, a term that describes a person simultaneously selling and buying the same stock, or bitcoin in this case, to create the appearance of activity in the market. In other words, it�s not real.

Those exchanges report an aggregated $6 billion in average daily bitcoin volume. The study finds that only $273 million of that is legitimate.

�The idea that there�s fake volume has been rumored for a long time, we were just the first people to systematically look at which exchanges were delivering real volume,� Hougan told CNBC.

The San Francisco-based firm compared at Coinbase Pro, which reports about $27 million in average daily volume in bitcoin. Its median �spread,� or difference between the price a seller wants and the price a buyer wants, for bitcoin was about 1 cent. That scenario passed Bitwise�s test for having real volume.

But in another stark comparison CoinBene � the biggest reported exchange on CoinMarketCap.com � has a nearly $15 spread. Hougan said they found other extreme examples of exchanges with a spread of more than $300.

�It is surprising that an exchange with almost 18 times the volume of Coinbase Pro would have a spread that is 1,500 times larger,� Bitwise said in the report.

Exchanges may have an incentive to report fake volume. Bad actors may look to attract listings for new initial coin offerings, or ICOs, who want their cryptocurrency on an exchange where more trading goes on, Bitwise said. Those fees can run from $1 million to $3 million per listing, according to data from Autonomous Next.

U.S. regulators have taken a cautious approach to making bitcoin mainstream for traders. The SEC highlighted the risk of manipulation as reason for rejecting applications for other cryptocurrency ETFs. The office of New York Attorney also flagged the issue in a recent report warning that exchanges were vulnerable. Because most cryptocurrency trading platforms don�t use the same monitoring tools as stock exchanges, SEC Chairman Jay Clayton has warned that investors may not get a fair assessment of bitcoin�s price.

�What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation,� Clayton said in November at the Consensus Invest Conference in Manhattan. �It�s an issue that needs to be addressed before I would be comfortable.�

Hougan said this also explains why trading volume for regulated bitcoin futures have seemed weak. Chicago-based CME and Cboe began listing bitcoin derivatives at the end of 2017 but have had much lower volumes than the $6 billion reported by unregulated exchanges.

�When you realize the size of the real bitcoin market, the CME starts to look a lot more significant,� Hougan said.

# ? Mar 22, 2019 18:09

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# ? Jun 7, 2024 08:37

Luckyellow: Sep 25, 2007; Pillbug

So when you delete all the stupid crap, all the scams, and all of the fraudulent transactions, it's a perfect rational market!

# ? Mar 22, 2019 18:23

Spatial: Nov 15, 2007

There was a point a few years back where some new Chinese law came into effect and the volume on their exhanges dropped by 99.999%

# ? Mar 22, 2019 19:38

Rev. Dr. Moses P. Lester: Oct 3, 2000

95% fraudulent is better than my presumptions, I think this article has improved my opinion of bitcoin slightly

# ? Mar 22, 2019 19:41

klafbang: Nov 18, 2009; Clapping Larry

That sure was a lot of words to say "all the other buttcoins are scams, but ours is good and honest, ~~believe us~~"invest" in us.

# ? Mar 22, 2019 19:57

CannonFodder: Jan 26, 2001; Passion’s Wrench

Rev. Dr. Moses P. Lester posted:

95% fraudulent is better than my presumptions, I think this article has improved my opinion of bitcoin slightly

The built in limit on transactions per second prevents high frequency trading. Otherwise the real transactions would be 1 in 100 million. Homeopathic currency trading.

Ps: I think HFT on Wall Street is also bullshit.

# ? Mar 22, 2019 19:57

klafbang: Nov 18, 2009; Clapping Larry

Bitcoin trading doesn't happen on the blockchain. The only thing preventing HFT is that all echanges are written in PHP and backed by databases stored in Excel on ephemeral storage.

# ? Mar 22, 2019 20:01

divabot: Jun 17, 2015; A polite little mouse!

yeah. in late 2017, the blockchain wars meant that BTC transaction times hit an hour cos Bitmain shifted all the mining to BCH.

nobody cared, because all the action was on the exchanges. NUMBER GO UP

# ? Mar 23, 2019 01:10

Mumpy Puffinz: Aug 11, 2008; Nap Ghost

divabot posted:

yeah. in late 2017, the blockchain wars meant that BTC transaction times hit an hour cos Bitmain shifted all the mining to BCH.

nobody cared, because all the action was on the exchanges. NUMBER GO UP

I love you Divabot!

# ? Mar 23, 2019 01:12

I would blow Dane Cook: Dec 26, 2008

https://twitter.com/mattsinger/status/1108451138922270734

# ? Mar 23, 2019 01:43

Norton the First: Dec 4, 2018; by Fluffdaddy

10% of the exam for a finance charter I took yesterday was about "blockchain and its applications." I couldn't believe my luck. Thanks thread!

# ? Mar 23, 2019 15:45

oohhboy: Jun 8, 2013; by Jeffrey of YOSPOS

Was the answer: None?

# ? Mar 23, 2019 15:53

Norton the First: Dec 4, 2018; by Fluffdaddy

I think you're forgetting all the nerdy recluses who now have reliable drug hook ups for the first time in their lives. ~~Crypto~~ Blockchain is a gamechanger.

# ? Mar 23, 2019 16:17

By popular demand: Jul 17, 2007; IT *BZZT* WASP ME--
IT WASP ME ALL *BZZT* ALONG!

I think that I'd honestly prefer getting arrested than buy drugs with buttcoin.

# ? Mar 23, 2019 16:45

Captain Yossarian: Feb 24, 2011; All new" Rings of Fire"

I would blow Dane Cook posted:

https://twitter.com/mattsinger/status/1108451138922270734

Ayyy lol

# ? Mar 23, 2019 17:32

Paladinus: Jan 11, 2014; heyHEYYYY!!!

By popular demand posted:

I think that I'd honestly prefer getting arrested than buy drugs with buttcoin.

You can easily do both.

# ? Mar 24, 2019 00:10

Play: Apr 25, 2006; Strong stroll for a mangy stray

https://twitter.com/cburniske/statu...D362%23lastpost

it's starting to get less funny now that it's so predictable

# ? Mar 26, 2019 23:00

Powershift: Nov 23, 2009

Play posted:

it's starting to get less funny now that it's so predictable

You know a show's in trouble when it starts bringing back old characters. like the WWE trying to bring back all the 60 year old Attitude generation wrestlers.

# ? Mar 26, 2019 23:11

I would blow Dane Cook: Dec 26, 2008

Bad news everyone

https://twitter.com/NotSkycoinCEO/status/1108556193276911616

# ? Mar 28, 2019 02:02

ItBurns: Jul 24, 2007

https://www.bloomberg.com/news/audio/2019-03-22/a-crypto-critic-says-bitcoin-needs-to-burn-with-fire-podcast

tl;dr: The hosts are amazed that they've actually scoured the dark recesses of the universe enough to find someone that thinks crypto is bad and dumb, but is also not an idiot like all those other people who say that. Generally, the guest is found to be adorable by the hosts for his loony tinfoil conspiracies on how Bitcoin is neither a good currency or store of value and has spent the last 24 months 'speed running 500 years of economic failure' (paraphrasing).

# ? Mar 28, 2019 14:10

poverty goat: Feb 15, 2004

I would blow Dane Cook posted:

Bad news everyone

Also, the biggest drug market, which has operated continuously for 6 years, is calling it quits and allowing everyone time to finish transactions and withdraw their coins without an exit scam...

... which might actually indicate that it's finally been compromised. the announcement wasn't signed, which is unusual, so people are speculating that the FBI is going to try to track big withdrawls, and may have compromised the anointed successor

poverty goat fucked around with this message at 14:36 on Mar 28, 2019

# ? Mar 28, 2019 14:33

Goa Tse-tung: Feb 11, 2008; ;3; Yams Fan

CannonFodder posted:

Ps: I think HFT on Wall Street is also bullshit.

HFT does provide liquidity to a market, which mathematically has been proven to depress prices of stocks i.e. without HFT you are paying a transaction charge to trade

for non-traders it's insane and unfair and all the things

# ? Mar 28, 2019 14:47

Norton the First: Dec 4, 2018; by Fluffdaddy

poverty goat posted:

Also, the biggest drug market, which has operated continuously for 6 years, is calling it quits and allowing everyone time to finish transactions and withdraw their coins without an exit scam...

goddamnit now where am I gonna get my ketamine?!?!?!

# ? Mar 28, 2019 17:01

poverty goat: Feb 15, 2004

Norton the First posted:

goddamnit now where am I gonna get my ketamine?!?!?!

you'll just have to rob a vet like a normal person

# ? Mar 28, 2019 18:03

mmj: Dec 22, 2006; I've always been a bit confrontational

Norton the First posted:

goddamnit now where am I gonna get my ketamine?!?!?!

Don't worry, ketamine-2-go just switched to a .gov address, that's all

# ? Mar 28, 2019 19:51

poverty goat: Feb 15, 2004

The FDA just approved ketamine for depression but it's like $500. Lmao

# ? Mar 28, 2019 19:54

klafbang: Nov 18, 2009; Clapping Larry

mmj posted:

Don't worry, ketamine-2-go just switched to a .gov address, that's all

This is actually good for bitcoin. Now, ketamine-2-gov accepts filthy fiat USD, which legitimizes drug trading over the internet, which in turn legitimizes bitcoin. 2-the-moon!

# ? Mar 28, 2019 20:06

gary oldmans diary: Sep 26, 2005

thinkin about those butts

https://www.google.com/search?q=Dukatenscheisser

gary oldmans diary fucked around with this message at 23:07 on Mar 29, 2019

# ? Mar 29, 2019 23:05

Wall Balls: Jun 3, 2007; Spanish Castle Magic

https://trailers.apple.com/trailers/lions_gate/crypto/

# ? Mar 30, 2019 02:35

Mumpy Puffinz: Aug 11, 2008; Nap Ghost

Wall Balls posted:

https://trailers.apple.com/trailers/lions_gate/crypto/

lol

# ? Mar 30, 2019 02:38

orange juche: Mar 14, 2012

Wall Balls posted:

https://trailers.apple.com/trailers/lions_gate/crypto/

I'm the folder labelled "Kickbacks"

# ? Mar 30, 2019 02:47

DerekSmartymans: Feb 14, 2005; The
Copacetic
Ascetic

orange juche posted:

I'm the folder labelled "Kickbacks"

my_crimes.txt

# ? Mar 30, 2019 03:04

Mumpy Puffinz: Aug 11, 2008; Nap Ghost

DerekSmartymans posted:

my_crimes.txt

# ? Mar 30, 2019 03:18

LethalGeek: Nov 4, 2009

Wall Balls posted:

https://trailers.apple.com/trailers/lions_gate/crypto/

Can't stop laughing at this

# ? Mar 30, 2019 04:31

NtotheTC: Dec 31, 2007

wow they couldn't even get liam hemsworth

# ? Mar 30, 2019 08:58

Pochoclo: Feb 4, 2008; No...; Clapping Larry

Wall Balls posted:

https://trailers.apple.com/trailers/lions_gate/crypto/

I would have thought that with Hateful Eight and Guardians of the Galaxy, Kurt Russell's bank account wouldn't be doing so goddamn bad as to consider this.

# ? Mar 30, 2019 18:51

wid: Sep 7, 2005; Living in paradise (only bombed once)

The guy sounds like he just enjoys working. He's Kurt loving Russel. He got nothing else to prove and probably just hate sitting in his house doing nothing.

# ? Mar 31, 2019 02:09

Razorwired: Dec 7, 2008; It's about to start!

Yeah he also did an action movie where he played Santa Claus.

Pretty sure Kurt's just victory lapping these days.

# ? Mar 31, 2019 03:01

Parkingtigers: Feb 23, 2008; TARGET CONSUMER
LOVES EVERY FUCKING GAME EVER MADE. EVER.

https://twitter.com/katebevan/status/1111988852493897730?s=21

# ? Mar 31, 2019 05:59

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# ? Jun 7, 2024 08:37

let it mellow: Jun 1, 2000; Dinosaur Gum

ok, gurf, why should we watch your video

# ? Mar 31, 2019 06:13

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