{"id":11377,"date":"2018-12-17T15:57:48","date_gmt":"2018-12-17T15:57:48","guid":{"rendered":"https:\/\/davidgerard.co.uk\/blockchain\/?p=11377"},"modified":"2021-03-23T11:00:47","modified_gmt":"2021-03-23T11:00:47","slug":"the-bart-sudden-hundreds-of-bitcoin-pumps-or-dumps-to-burn-the-margin-traders","status":"publish","type":"post","link":"https:\/\/davidgerard.co.uk\/blockchain\/2018\/12\/17\/the-bart-sudden-hundreds-of-bitcoin-pumps-or-dumps-to-burn-the-margin-traders\/","title":{"rendered":"The ‘Bart’ \u2014 sudden hundreds-of-Bitcoin pumps or dumps, to burn the margin traders"},"content":{"rendered":"

My idea of fun is watching the Bitcoin price on Coinbase<\/a> \u2014 preferably the 1-minute candle charts. I favour Coinbase because it’s the biggest exchange dealing in actual US dollars. You can see the pumps and dumps happening in real time!<\/p>\n

There was a purchase of over 1000 BTC around 12:10 UTC today, which pumped the price $120:<\/p>\n

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\"\"<\/a><\/p>\n

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I got email asking about it. I explained that this sort of thing happens all the time<\/em> \u2014 because the crypto markets are really thinly traded.<\/p>\n

You’ll typically see huge pumps, then stability for a few hours, then a huge dump. Crypto watchers call these “Barts”, ‘cos they look a bit like Bart Simpson’s haircut.<\/p>\n

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\"\"<\/a><\/p>\n

 <\/p>\n

These aren’t just a crypto thing \u2014 you’ll see them for all manner of thinly-traded commodities in ill-regulated markets, or in forex.<\/p>\n

The motivation is to burn margin traders,<\/a> whether short (betting the price will go down) or long (betting it’ll go up) \u2014 you’ll see a Bart when it’s profitable to manipulate the number that a derivative<\/a> depends upon. Pump or drop the price a hundred dollars, win the margin bet against someone who bet the other way.<\/p>\n

(And … they eat your shorts.)<\/p>\n

Some think this is the exchanges deliberately burning the shorts. This is possible \u2014 crypto is all but unregulated, though this sort of thing is why the CFTC is engaged in a criminal<\/em> investigation into the Bitcoin markets<\/a> \u2014 but really, it could just be the large traders\u00a0\u2014 the whales.<\/p>\n

(Who work very closely with the exchanges, so.)<\/p>\n

This is why the SEC keeps<\/a> refusing<\/a> to approve<\/a> a Bitcoin exchange-traded fund<\/a> \u2014 the market is too thin, and really obviously and easily manipulated. Other cryptos are even worse. I’m still surprised the CFTC lets the CME\/CBOE Bitcoin futures happen.<\/p>\n

Finance journalists need to stop treating crypto as an efficient market that responds to concerns. It\u2019s a thinly-traded unregulated playground for whales, out to wreck the margin traders. A $400 dip in fifteen minutes is not a “market signal” \u2014 it’s a deliberate dump to manipulate the price.<\/p>\n

Though there’s still downward pressure on the price \u2014 all the suckers from the bubble have gone home, so they’re not buying … but the miners still have to sell coins for actual money to pay for their electricity.<\/p>\n

And even more so now that the price of mining one bitcoin<\/a> is at \u2014 or above<\/em>\u00a0\u2014 what you could get for selling that bitcoin.<\/p>\n

So one minute you’ll see a sudden $100 increase in the price that cost 130 BTC of dollars\u00a0\u2014 and those are\u00a0actual dollars<\/em> going in\u00a0\u2014 followed the next minute by a matching $100 drop that came from selling only 30 BTC. It’s much easier to drop the price than raise it.<\/p>\n

I expect much more soap-opera fun for the sort of people who watch crypto market charts, e.g.<\/i> me.<\/p>\n

\"Become<\/a>

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Finance journalists need to stop treating crypto as an efficient market that responds to concerns. It\u2019s a thinly-traded unregulated playground for whales, out to wreck the margin traders. <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[288,1080],"class_list":["post-11377","post","type-post","status-publish","format-standard","hentry","category-uncategorised","tag-coinbase","tag-trading"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/11377","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/comments?post=11377"}],"version-history":[{"count":15,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/11377\/revisions"}],"predecessor-version":[{"id":19043,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/11377\/revisions\/19043"}],"wp:attachment":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/media?parent=11377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/categories?post=11377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/tags?post=11377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}