Bitcoin Forum

It seems commonly accepted among bitcoiners that wealthy individuals or cartels can "manipulate" the price of bitcoin. However, it is never explained how they supposedly do this. Every brainstorm I've come up with simply results in the supposed manipulators losing more money than they make if they tried to artificially drive the price of bitcoin away from the equilibrium free market price.

So I'd like to ask those who believe in price manipulation for an explanation (as well as evidence and examples) of how this manipulation supposedly works, in such a way that the wealthy manipulators don't fritter away their wealth in the attempt.

one way is this:
step 0) timing is everything!
step 1) you should be someone who can affect the media as an example i can name dicks like Mike Hearn and Craig Wright.
step 2) you spread some kind of FUD, in short crap, about bitcoin and how it is going to die. or how you are satoshi and how you are going to "dump" your coins soon, in other words create panic.
step 3) start buying cheap coins :D
step 4) peanut butter jelly time

https://www.youtube.com/watch?v=LVPNXsc4wsQ

1. Usually, it will involve a pumping phase where they strategically buy in to deceive others of a increase in demand and interest...

2. This will result in the sellers becoming greedy- increase their sell price, and the buyers wanting to jump onto the train- willing to pay more.

3. The price increase will then continue even when the pumping action stopped.

4. When the price is right, they offload their holdings resulting in the dumping phase.

I also did not know about it, but I've heard that Mt.gox already doing that and resulted in a negative impact on bitcoin. I think there should be no more people who manipulate bitcoin, because it can bring bad effects for us all

The only case I know is the Willy Bot pump, and even that I have my doubts, check it out:

https://willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/

Other situations, like you said, people will end up losing money.

Only big companies or big holders of bitcoin  can do that because they have all the means to do that but I guess timing and collaboration is one of the key,Bitcoin has a huge market and a major player it is so hard to manipulate it..

Manipulation needs lot of money in both bitcoin and in fiat and creating a big sell wall to force price go down and buy whatever you can when price is like 5-10% than the point you have created sell wall. And removing that big sell wall and giving market some space to again get pumped and selling again what you bought at higher price.

there are actually many ways to do that. but most off them are expensive and you'll most likely lose money instead of getting profit. because to get profit you'll need to buy low and sell high enough to cover your expenses.
the ones with little to no expenses depends entirely on your luck.

back in 2012 when prices were low it was actually a fun game to do.

back then it was done simply by creating "walls"
in short if you dont want the price to go down by 5 you would create a resistance wall that causes
it to cost more for sellers to drop the price
for instance if the price was X you would put buys at X-5

ill make it easy to understand. first an image to go with the explanation
https://i.imgur.com/Zqn6QIq.png

A: imagine the price is just about $665 and you dont want to going to $659
you can see that it only takes about 80 bitcoins to eat up all them orders.

B: so you put in an order(eg: 30btc) far enough to not get hit soon but close enough for people to notice now that it takes 110btc to eat all them orders

C: other people react. they see that theres now a larger then normal wall at $660 so theres no point in them adding an order below that as they dont have time to wait, thinking lower orders wont happen.. they become convinced the price will hold at that amount or higher
so some people add orders to $660 to reinforce the wall. and others put orders infront because they want their orders hit and satisfied the price wont drop further
this results in it taking 140btc to eat all of them orders

D: more people do the same adding more orders. now it going to take 200 btc to eat them orders (150btc before your order is touched) and those two orders after you have least chance of getting hit out of the orders in your price point

E: now here is the smart thing. knowing that orders are processed based on which ones at a price point was listed first, gets processed first. if you cancel your 30btc order at $660, the orders after you become next in line and then you can reapply your order again (in just milliseconds) to make you last in the queue. thus reducing your chances of your order being hit. so even without anyone else adding new orders the total coins are still 200btc on the order books, by just cancelling and reapplying your order. you move behind the two other orders, meaning they now get hit first should the price get that low.
now its still 200btc orderbook but now taking 170btc before your order is hit. most people dont know that if you dont want your order actually being hit you make sure your order is the most recently applied..
this can be monitored by simply seeing your price point volume increasing which obviously means more people are adding ontop of yours. so cancel and reapply to remain last in line.

many people dont realise it so they still see the order volume totals. and dont realise who is first or last. nor do they care
basically using something like 30btc can change other peoples trading patterns to make them have 170bt instead of 80 even before your order gets touched, all because of knowledge of how traders psychology works

it can only be done if you have a lot of money and invested in bitcoin already. and one of the ways is to put up huge walls in either way of market a sell wall or buy wall depending on your intentions!

I have done this before with a few thousand dollars on one of the alt exchanges, though the big manipulators probably don't do it this way.

I would put in a few small buy orders in order to get about half of what I wanted to buy. Over time so the price did not rise too quickly.

Let's assume I accumulate 200 ALTC (AltCoin) at the average price of $5 and want to buy another $1,000 worth.

Then I would put in a large sell order, like 100 ALTC at $5 (assume the current sell price is $4.95). Anyone who is looking to sell ALTC sees that there is a "big" sell wall so they put their sell orders below mine so they can sell. They may put their sell order at a lower price like $4.90, then others start to put their sell orders below that until the sell price is at $4.80. I then stick a 50 ALTC sell wall at $4.85. More people put the price lower so that they can sell, the price gets down to $4.75. I put another 50 ALTC sell wall at $4.80. More coins are put at lower prices and during that time I pull the original 100 ALTC wall and move it down to $4.60 (always keeping out of selling range because I do not actually want to sell).

Eventually I put a huge sell wall of 200 ALTC at $4.55 and watch as people selling drop their price to $4.50. At this point I start buying about half of the available coins at $4.50. Just enough to slowly accumulate coins and use my $1,000 to buy cheap coins. If all goes well, I can get 222 coins with that $1,000 instead of my original 200. I then buy up the last of the coins below my wall and then pull the wall allowing a rush of buys to drive the price back up to the $5 price, maybe even with a rally driving the price higher (which I can then take advantage of and sell to get back to my starting point).

Same can be done in the opposite direction, pumping up the price before letting it drop. Also known as the pump and dump.

You can tell that this happens on the larger scale when a huge 1000 bitcoin wall goes up, then when someone tries to buy into it the wall disappears (they don't actually want to sell).


Edit: Like franky said.

Where does manipulation end and regular trading begin? There's gotta be a line somewhere. Surely in theory manipulating is the soundest way to trade.

If crypto markets ever are regulated like stock markets expect to see even more fud than there is now. There's no law against it and so many people are dumb enough to fall for it.

it doesnt take as much as you may think.. you are also playing other peoples greed. making them order "with you" thus due to them seeing there is some resistance.

secondly most exchanges just place orders. knowing they never have to pay themselves out. they literally "create" orders backed by nothing. which is happening more recently. but even still just one wall creates everyone else to move their orders up this reinforcing the wall even further

seems me and elwar played the same games in the good old days

On large scale only those people can manipulate the price of bitcoin who have big piles of bitcoin, while on small echanges i am seeing that people with a little amount can also manipulate the price, i also have sold some bits at the price of $590 when the normal price was around $550.

https://shapeshift.io/images/stein_thumb.jpg

Never forget, RIP Bearwhale 2014. :D

lol karpeles whale was the first "known" incidence of the "fake"(not backed) order whaling

and here is the real kicker that actually blows peoples minds when they sit back and realise it..

not all 15million coins are on an exchange
not even 1 million coins are on an exchange..

basic rule is most "good" day traders do 5 trades a day (thats 5 buys 5 sells)
so look at the daily trade volumes and divide the number by 10 to see how many actual coins are being swapped.

there are a few people that think (and makes sense) that those exchanges with even higher trade volumes are the exchanges themselves running bots and trading using unbacked values.

dont think that the exchanges are transacting 15million coins a day to give the 15million coins a value of $665 each.
it only takes a couple thousand to move the price valuation, which then psychology of panic buying/selling takes care of the other few thousands of coins on different exchanges whilst they follow spikes and dumps like sheep

I don't think an individual trader has the power to manipulate bitcoin price in any way. Because it is very rare to have such a huge amount in hand of an individual trader.

Another way to manipulate bitcoin price is to do negative publicity. But it is again almost impossible for an individual. Only an elite group of trader and miners can do it.

Yes, thanks for these explanations. They do clarify things I've noticed on the trading charts and help me understand better what's going on.

I can see that there is some risk to this, in that another whale on the opposite side of the fence just might bite on the orders you placed (but didn't intend to be filled).  But I can also see how most of the time this would work to modestly manipulate the price.

With a larger market like bitcoin, and automated bots looking for arbitrage opportunities across exchanges, I imagine it would be much harder to pull off. But I can see how many alts would be vulnerable to this sort of thing.

People with <100BTC or <1000BTC don't have too much power to manipulate the price. Neither those like me that have very low amount of bitcoin. What we can do is only to dump the price on particular exchanges (not those that are popular) and manipulate a specific altcoin price (only dumping)

You would probably need a lot of money/bitcoins
to do that. And / or the opportunity to spread FUD or positive rumours
with wide media reach.

You need a couple of whales to team together like a pod of whales and then start selling or buying on several exchanges. You also time this with good and bad news, so that it does not stand out too

much. We are talking about a lot of coins and a lot of fiat, so do not even try to do this with your 10 to 100 coins.  ::) Can you guys still remember the user who "infiltrated" the whale club and shared

the secrets on the forum. That was a entertaining thread.. cannot find it now.  :( ... The secret handshake was a high 5 and a slap on the ass.  ;D

It's start with money and lots of it. Then you need to find a good moment when there are less sell orders or the market is weak and silent. From there you can start pumping with little or big steps. Obviously there is more to that then this, but this is a great way to start.

And if you have a lot of money, you can afford to make some mistakes ;)

That's not a "pump and dump". This is what a pump and dump is:

just buying orders like some newbies think 'requires large whales to achieve price movements'.. is not a pump and dump.. thats just buying and selling.. which is nothing special.. and simply termed speculative purchases

pump and dump is the use of psychologically causing others to change their trading patterns to raise the price (pump) and lower the price(dump) by the reaction of the information provided to them

these days if does not even need to be done by spreading FUD, it does not even have to be done by buying alot of coins personally or selling alot of coins personally.
these days it can be done by bots or humans, playfully setting walls of resistance to prompt other people to change trading patterns/decisions/prices.
market analysis of order volumes gives traders more info then FUD stories can..

couple years back when btc-e and the troll chatbox was a main trading experience.. more "manipulation" was done via walls then by spreading fud in chat.
even at MTGox in the early days, just a wall of 1000btc ($2000) was enough to sway prices in a new direction

Simple as this, I can manipulate the value of bitcoin by buying or making bitcoin, earning bitcoin as many as i can, because of that, the supply will bitcoin will decrease and the value will increase. Just like halving.

Generally speaking, if market cap is M, one needs 30 percent of  M to manipulate that market. For Bitcoin, this translate to about 3 or 4 billion now a days.
I don't think anyone is dare/trying to do that any more. But in alt coin world, this happenes a lot.

I think there are lots of approach how to manipulate bitcoin price but i think the most effective is thru promotion / demotion scheme.  It's very effective.  We can use media to FUD and create panic.  Or use it to promote and boost sales.  Information, how it was passed or how it was hidden plays a great role in one developments / program success.  If i have the power to manipulate the flow of information about BTC, I can control the price.  so to manipulate the price of bitcoin i'll just manipulate the information about bitcoin.

That's for sure, if someone hold a large amount of the capital they would probably thinking of controlling the equilibrium of the market. However I think in BTC now it is highly impossible due to 10+ billion market cap.

Maybe some freaked out billionaire has the capital and the time to mess with bitcoin course.
But in the end he would probably lose some money if he tries to elevate the price by buying coins.
The average user has no chance of doing that.

And only big companies or community can manipulate bitcoin volume. Manipulate is one important reason "why bitcoin price is rising" Some big companies mix this way with another to make a big effect for bitcoin globally.

To manipulate the prices of bitcoins is not is a scope of a common man. Even if you have 100 or 1000 Bitcoin it is difficult . In order to do so you need a big community of bitcoin users like currently Chinese are purchasing like madly and it has effect on the price of bitcoins. So in order to manipulate the bitcoin price we need a whole lots of bitcoin users with lots of bitcoins with them and all of them has same intentions like buying or selling at the same time.

It is not that hard to start a 'manipulation' I suspect that you don't need that much asset for that. In the internet era it is easier to start a 'pump'.
Bitcoin users are crowd which could be easily manipulated - it is like they want to be deceived themselves.

You can see it yourself - bitcoiners will react allergically to all kinds of even remotely bad news and overly optimistic when there is chance of profit ahead.

It is easy to manipulate bitcoin - easier that stocks, because we have no real company behind it and all information could be stretched to promote desired behavior of the market.

yeah i think it will be difficult for you to manipulate the price of bitcoin now. Of course you need a very large bitcoin. and it is a hindrance to you. and do not necessarily your manipulation occur or be successful

Yeah ,it is not easy as we think ,i agree that it needs a lot of bitcoins or a group of bitcoiners just to manipulate the price .
I think there's one more because most of bitcoiners are joining on the crowd if it goes up more possibly others are buying until halving is not end .then if it goes down they follow to sell some coins and then buy again .that was the flow right now so if big coin holders also do that .it will as easy to manipulate those fluctuations.