Bitcoin price? Who is making it?

[adamstgBit]

even now china manipulate uᴉoɔʇᴉq price but i think they not full control uᴉoɔʇᴉq market at least trader from china can't settle price.

when 10 million poeple hit buy with 12$ they lose control instantly.
there is no "control" over markets, best you can really do is short term manipulation with a good chance of getting fucked.

[adamstgBit]

It is made by supply and demand capacity, if more supply and slow demand = price dump, if more demand and low supply = price goes up

its supply demand and Speculation

Speculation has the most impact on moondollars price
first its a money and all monies only have value because everyone believe they do ( this is pure speculation )
second its not clear what is a "uᴉoɔʇᴉq",  digital gold? settlement layer?  digital cash? what is it? how knows!  ( this is pure speculation )
third its pretty clear the uᴉoɔʇᴉq ecosystem has not fully matured and the exception is that it will get better and better  ( this is pure speculation )
speculation is the driving force behind moondollars price.
and supply demand is actually a function of speculation, poeple speculate moondollars will hold value and so they use it to transact.

How is it made the uᴉoɔʇᴉq price?

millions of poeple Speculating.

[RodeoX]

In a word... ARBITRAGE.

What is 'Arbitrage'?

Arbitrage is the simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. Arbitrage exists as a result of market inefficiencies; it provides a mechanism to ensure prices do not deviate substantially from fair value for long periods of time.

Honestly I dont see anyone doing this arbitrage.

Unless they have a friend overseas or something with the china exchanges and for one can collaberate to sell back to u.s markets.

Selling one market to the next is harder then it sounds.

I think it is harder than it used to be. But I know people who do it every day. As you point out, some markets like China are hard to get into and when you partner up with someone abroad you have to share profits. Still, no money is ever left on the table for long.
A few years ago there were big differences in price between exchanges and arbitrage was a lot more common.

[mayax]

well, there is an exchanger cartel. The biggest ones agreed to collaborate each other and here we are. It is the same BTC price despite the fact that BTC is NOT a centralized market. IT IS NOT possible a such thing while there is not any central authority.

example : Coinbase  and Bistamp are very tightly coupled. They have the same shareholders

Look to ALL the biggest exchangers and you will see a similar price even it's from Singapore, China, USA or Europe... HOW IS it possible if there is no cartel?

[LMGTFY]

well, there is an exchanger cartel. The biggest ones agreed to collaborate each other and here we are. It is the same BTC price despite the fact that BTC is NOT a centralized market. IT IS NOT possible a such thing while there is not any central authority.

example : Coinbase  and Bistamp are very tightly coupled. They have the same shareholders

Look to ALL the biggest exchangers and you will see a similar price even it's from Singapore, China, USA or Europe... HOW IS it possible if there is no cartel?

All forex is decentralised. Try buying GBP in Singapore, China, the USA or Europe and you'll see a similar price.

The reason prices are similar is due to arbitrage: if 1 GBP costs less in Singapore than it does in China, arbitrageurs will buy GBP in Singapore and sell it in China. The same thing happens with BTC.

I'm not saying that there isn't a cartel operating, I really don't don't know. But this isn't evidence of it.

[fravia]

i think that people themselves make the bitcoin price and no governments can have any decent impact on the price and it is a really good thing to be honest that it is not centralized

i think that bitcoin is a really good currency because of the decentralization aspect as it cannot be impacted in a bad way and people can be their own banks when it comes to bitcoin

[mayax]

well, there is an exchanger cartel. The biggest ones agreed to collaborate each other and here we are. It is the same BTC price despite the fact that BTC is NOT a centralized market. IT IS NOT possible a such thing while there is not any central authority.

example : Coinbase  and Bistamp are very tightly coupled. They have the same shareholders

Look to ALL the biggest exchangers and you will see a similar price even it's from Singapore, China, USA or Europe... HOW IS it possible if there is no cartel?

All forex is decentralised. Try buying GBP in Singapore, China, the USA or Europe and you'll see a similar price.

The reason prices are similar is due to arbitrage: if 1 GBP costs less in Singapore than it does in China, arbitrageurs will buy GBP in Singapore and sell it in China. The same thing happens with BTC.

I'm not saying that there isn't a cartel operating, I really don't don't know. But this isn't evidence of it.

The forex companies are regulated. They are financial licensed, a gov authority supervise them.

Let's take the first 5 exchangers:

Okcoin = where is regulated? Nowhere! Even China or HK requires a financial license for their activity
BTC China =  same as above
Huobi  = same as above
BTC-e = they don't even have an address on their website. they claim to be registered in Cyprus (EU). EU requires a license for their activity
Bitfinex = they claimed to be registered in BVI which requires a financial license for their activity.
Kraken = unlicensed money transmitter in USA. It's a matter of time until the feds will close it down.

So, these are the companies who "control" Bitcoin.

 Bitcoin exchangers are coordinate their prices across continental divides. One goes down – they all go down. The question is why the public tolerates their scam.

The exchanges’ arbitrage-bots equalize prices between one another. IT's NOT NORMAL in a DEcentralized market as Bitcoin.

They’re hoping no-one will notice, and suckers will just keep depositing bitcoins in their vulnerable, corruptible coffers. Proof-of-solvency., Proof-of-reserve. Proof-of-existence, Proof or the bank wires in and out...where are all these?

[sishendaoye]

i think that people themselves make the bitcoin price and no governments can have any decent impact on the price and it is a really good thing to be honest that it is not centralized

i think that bitcoin is a really good currency because of the decentralization aspect as it cannot be impacted in a bad way and people can be their own banks when it comes to bitcoin

Normally this would be the case, but many others, me included, think that the price is somehow manipulated by a group of whales. They try to move the price up when they feel ti's time for a so called pump and dump scheme.

[Razick]

How is it made the Bitcoin price?

How is it possible in a so called decentralized market, where the exchangers are(should be) independent entities, ALL of them to have the same price when they certainly don't have a "the same" order book(same clients, same orders) ? How is that come?

Can someone explain ?

The market solves that problem via arbitrage. To paraphrase Adam Smith, individuals working for their own profit serve the public good (stable, accurate markets in this case).

Consider this: If one exchange is selling for $400 and one for $425, which would you buy in? Which would you sell in? The supply/demand equation balances out across exchanges because people seek the best deal. Sometimes, however, there actually is a difference which creates an (often short-lived) opportunity for investors who seek to make a profit buying on one exchange and selling on the other. This, of course, puts pressure on the prices to equalize.

[Razick]

In a word... ARBITRAGE.

What is 'Arbitrage'?

Arbitrage is the simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. Arbitrage exists as a result of market inefficiencies; it provides a mechanism to ensure prices do not deviate substantially from fair value for long periods of time.

Honestly I dont see anyone doing this arbitrage.

Unless they have a friend overseas or something with the china exchanges and for one can collaberate to sell back to u.s markets.

Selling one market to the next is harder then it sounds.

I think it is harder than it used to be. But I know people who do it every day. As you point out, some markets like China are hard to get into and when you partner up with someone abroad you have to share profits. Still, no money is ever left on the table for long.
A few years ago there were big differences in price between exchanges and arbitrage was a lot more common.

As I mentioned in my previous post. Actual arbitrage is not necessary to equalize prices across exchanges. People looking to buy seek the lowest price and people looking to sell seek the highest, which equalizes supply and demand across exchanges.

[zimmah]

It is made by supply and demand capacity, if more supply and slow demand = price dump, if more demand and low supply = price goes up

that means all the big exchangers(5-6) should have the same demand because their prices are almost the same which is IMPOSSIBLE !

it's an unregulated market, remember? so, one exchanger may have 100 orders for buy and none for sell and other 1000 for sell and 10 for buy.

the act of arbitrage:

Let's say Alice sees that at Exchange A the price of bitcoin is $410 per bitcoin

Let's say Alice also sees that at exchange B the price of bitcoin is $600 per bitcoin.

Alice now goes to her bank, withdraws $5000 and buys $5000 worth of bitcoin at exchange A, because her buy created a bit more demand at exchange A, the price rose a little bit to $430 per bitcoin, and Alice now has about 11.5 bitcoin.

Alice now sends the 11.5 bitcoin to exchange B, where she sells them. Because of the sudden increase in supply at exchange B, the price at exchange B drops a little, but she still manages to make $6500 from selling 11.5 bitcoin, the price is now at $550 at Exchange B

Alice sends the dollars to exchange A and repeats the process.

Eventually the price between the exchanges will be so close together that the fees would cost too much for alice to profit (i left out the fees in this example).

Basically, people like alice in this example make money from trading between exchanges, but usually it's done by bots because humans can't do it fast enough often.

In a word... ARBITRAGE.

What is 'Arbitrage'?

Arbitrage is the simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. Arbitrage exists as a result of market inefficiencies; it provides a mechanism to ensure prices do not deviate substantially from fair value for long periods of time.

Honestly I dont see anyone doing this arbitrage.

Unless they have a friend overseas or something with the china exchanges and for one can collaberate to sell back to u.s markets.

Selling one market to the next is harder then it sounds.

I think it is harder than it used to be. But I know people who do it every day. As you point out, some markets like China are hard to get into and when you partner up with someone abroad you have to share profits. Still, no money is ever left on the table for long.
A few years ago there were big differences in price between exchanges and arbitrage was a lot more common.

As I mentioned in my previous post. Actual arbitrage is not necessary to equalize prices across exchanges. People looking to buy seek the lowest price and people looking to sell seek the highest, which equalizes supply and demand across exchanges.

It's not the goal to equalize exchanges, t's the result of arbitrage.

The goal is to make profit.

[LMGTFY]

well, there is an exchanger cartel. The biggest ones agreed to collaborate each other and here we are. It is the same BTC price despite the fact that BTC is NOT a centralized market. IT IS NOT possible a such thing while there is not any central authority.

example : Coinbase  and Bistamp are very tightly coupled. They have the same shareholders

Look to ALL the biggest exchangers and you will see a similar price even it's from Singapore, China, USA or Europe... HOW IS it possible if there is no cartel?

All forex is decentralised. Try buying GBP in Singapore, China, the USA or Europe and you'll see a similar price.

The reason prices are similar is due to arbitrage: if 1 GBP costs less in Singapore than it does in China, arbitrageurs will buy GBP in Singapore and sell it in China. The same thing happens with BTC.

I'm not saying that there isn't a cartel operating, I really don't don't know. But this isn't evidence of it.

The forex companies are regulated. They are financial licensed, a gov authority supervise them.

Let's take the first 5 exchangers:

Okcoin = where is regulated? Nowhere! Even China or HK requires a financial license for their activity
BTC China =  same as above
Huobi  = same as above
BTC-e = they don't even have an address on their website. they claim to be registered in Cyprus (EU). EU requires a license for their activity
Bitfinex = they claimed to be registered in BVI which requires a financial license for their activity.
Kraken = unlicensed money transmitter in USA. It's a matter of time until the feds will close it down.

So, these are the companies who "control" Bitcoin.

 Bitcoin exchangers are coordinate their prices across continental divides. One goes down – they all go down. The question is why the public tolerates their scam.

The exchanges’ arbitrage-bots equalize prices between one another. IT's NOT NORMAL in a DEcentralized market as Bitcoin.

They’re hoping no-one will notice, and suckers will just keep depositing bitcoins in their vulnerable, corruptible coffers. Proof-of-solvency., Proof-of-reserve. Proof-of-existence, Proof or the bank wires in and out...where are all these?

Again, "I'm not saying that there isn't a cartel operating, I really don't don't know. But this isn't evidence of it."

It doesn't matter (for this purpose) whether or not the exchanges are regulated - if you buy GBP OTC on the streets of Rangoon from an unregulated money-changer the price will still be similar to the price you'd pay from a fully regulated exchange in New York or Paris (possibly slightly higher OTC to compensate the money-changer for the risk their taking, but not that much higher because otherwise people in Myanmar would buy their GBP from a regulated money-changer, or register with an exchange in Thailand (I dunno if this is possible, or there's even much Burmese demand for GBP - this is an example. Substitute countries of your choice, but the quest for profit remains, and it's that that leads to arbitrage and drives prices towards equilibrium).

This is what we would expect to see. With GBP, with USD, with BTC. When we do see it, it's expected. It's not evidence of a cartel operating.

Again again, there may well be a cartel operating. But price-similarity is not the smoking gun.

"Arbitrage-bots" are entirely normal in decentralized markets like forex. We may not like it, but the days of buying GBP in Britain and sending a telegram to a friend in the US to get them to "simultaneously" sell GBP in another country - those days are over. This can be - and has been - automated.

[mayax]

the arbitrage can exists on a regulate market. the fiat currencies are backed by a Central Bank. The forex companies MUST be licensed, they are verified, audited and so on.

Bitcoin maket is unregulated and so the most of the exchangers. Once, a company is not verified, it can do what ever it wants on an unregulate market.

You cannot compare the real forex market with the Bitcoin market where 90% is black market and shady exchangers

what real arbitrage can exist when ALL the big exchangers are using the Willy bot (same as MTgox) ? I think the chinesse exchangers have 80% less volume than the volume they show on their website. This is called price manipulation not arbitrage.

Willy bot increases the volume so that the potential clients to see how "big" is that exchanger and how many clients it has AND to manipulate the price for the exchanger interest too

in fact, the market is very low but the price manipulation remains.

[LMGTFY]

the arbitrage can exists on a regulate market. the fiat currencies are backed by a Central Bank. The forex companies MUST be licensed, they are verified, audited and so on.

Bitcoin maket is unregulated and so the most of the exchangers. Once, a company is not verified, it can do what ever it wants on an unregulate market.

You cannot compare the real forex market with the Bitcoin market where 90% is black market and shady exchangers

what real arbitrage can exist when ALL the big exchangers are using the Willy bot (same as MTgox) ? I think the chinesse exchangers have 80% less volume than the volume they show on their website. This is called price manipulation not arbitrage.

Willy bot increases the volume so that the potential clients to see how "big" is that exchanger and how many clients it has AND to manipulate the price for the exchanger interest too

in fact, the market is very low but the price manipulation remains.

Arbitrage can indeed exist in regulated markets. It can exist in all decentralized markets. It can even exist with centralized markets - stock prices from bucket shops during the Great Depression were the same - or very similar - to stock prices from licensed stock brokers.

Unlicensed OTC money-changers aren't licensed. Buy foreign currency on the street anywhere in the developing world and the chances are near 100% you won't be buying from a licensed money-changer. Yet mysteriously they'll charge prices similar to the prices charged by licensed exchanges.

Arbitrage has been around since forever. It existed long before governments started regulating and licensing foreign exchange.

I fail to see why some (unregulated) exchanges using bots prevents people engaging in arbitrage. There used to be a Google Docs spreadsheet showing BTC arbitrage opportunities - people used it, despite the exchanges being less regulated than today. They made money. I have no reason to think that people have stopped chasing profit, that they've stopped arbing.

Price manipulation occurs to a greater or lesser extent in all markets. It doesn't prevent arbitrage happening. If the price on one exchange is lower than another exchange, or I can buy something cheaper OTC than I could on an exchange - it will be profitable for me to buy while simultaneously selling on the second exchange. Price manipulation doesn't matter to me while I do this. Neither does volume, fake or otherwise. All that matters is the difference between the buy price and the sell price - the profit I make.

Again, "I'm not saying that there isn't a cartel operating, I really don't don't know. But this isn't evidence of it."

This is like you seeing Malory MalIntent breaking into my house one night, and the following day I wake up, realise I've been robbed, see that the sky is blue, and think to myself "The sky is blue. That's totally unexpected, therefore Malory MalIntent must have been the burglar." People are not going to think there is a scam in operation when what they're seeing is exactly what they'd expect to see.

[mayax]

you didn't say anything about fake volumes and price manipulation what results from that.

[LMGTFY]

you didn't say anything about fake volumes and price manipulation what results from that.

...
Price manipulation occurs to a greater or lesser extent in all markets. It doesn't prevent arbitrage happening. If the price on one exchange is lower than another exchange, or I can buy something cheaper OTC than I could on an exchange - it will be profitable for me to buy while simultaneously selling on the second exchange. Price manipulation doesn't matter to me while I do this. Neither does volume, fake or otherwise. All that matters is the difference between the buy price and the sell price - the profit I make.
...

[silentkiller]

How is it made the Bitcoin price?

How is it possible in a so called decentralized market, where the exchangers are(should be) independent entities, ALL of them to have the same price when they certainly don't have a "the same" order book(same clients, same orders) ? How is that come?

Can someone explain ?

definitely us, who uses and collecting bitcoins, companies, gambling and exchange sites.
its us holders,who is making the price of bitcoin.if we bitcoin holders decided to hold our bitcoins and no one will gonna sell any amount of it, im sure the price of bitcoin will reach on its highest price.

[Razick]

the arbitrage can exists on a regulate market. the fiat currencies are backed by a Central Bank. The forex companies MUST be licensed, they are verified, audited and so on.

Bitcoin maket is unregulated and so the most of the exchangers. Once, a company is not verified, it can do what ever it wants on an unregulate market.

You cannot compare the real forex market with the Bitcoin market where 90% is black market and shady exchangers

what real arbitrage can exist when ALL the big exchangers are using the Willy bot (same as MTgox) ? I think the chinesse exchangers have 80% less volume than the volume they show on their website. This is called price manipulation not arbitrage.

Willy bot increases the volume so that the potential clients to see how "big" is that exchanger and how many clients it has AND to manipulate the price for the exchanger interest too

in fact, the market is very low but the price manipulation remains.

Arbitrage does not require bots and CAN in fact be done legally on regulated FOREX exchanges. Arbitrage is not some shady manipulation tactic, it's a healthy, beneficial part of efficient markets.

[mayax]

again, you are talking about a regulated forex market with a real arbitrage. Bitcoin is not...Bitcoin is full of unknown exchangers who are manipulating the price via bots as they want. I am referring to the biggest ones. There is a cartel of 5-6 big exchangers.

Now, tell me that OKcoin who "owns" 90% from the BTC market ...it's for real; no bots, no fake transactions, no fake volume.

http://bitcoincharts.com/charts/volumepie/

If there are fake transactions and fake volumes that means there is HUGE price manipulation which is "somehow" illegal  

[LMGTFY]

again, you are talking about a regulated forex market with a real arbitrage. Bitcoin is not...Bitcoin is full of unknown exchangers who are manipulating the price via bots as they want. I am referring to the biggest ones. There is a cartel of 5-6 big exchangers.

Now, tell me that OKcoin who "owns" 90% from the BTC market ...it's for real; no bots, no fake transactions, no fake volume.

http://bitcoincharts.com/charts/volumepie/

If there are fake transactions and fake volumes that means there is HUGE price manipulation which is "somehow" illegal  

But, again, there may well be price manipulation - but price similarity between exchanges is not evidence of it.

And no, I'm not talking about a (solely) regulated forex market - I'm talking about a global forex market where many exchanges (in particular) are licensed and regulated, and many OTC money-changers may well not be.

There is no difference between arbitrage in a regulated market and arbitrage in a non-regulated market. If the price at one location is lower than the price at another location - it is profitable to engage in arbitrage, regardless of volume (fake or otherwise), regardless of the licensed/unlicensed status of the exchange, regardless of the regulations in place.

I could create two shady exchanges, AlphaExchange and ExchangeBeta. Neither are licensed or regulated. I fake the volume. You see a price of $450 per 1 BTC on AlphaExchange and a price of $455 per 1 BTC on ExchangeBeta - you realise you can make money if you simultaneously buy on Alpha and sell on Beta. In doing this you create demand on Alpha (pushing the price up), and you create supply on Beta (pushing the price down) - the prices on the two exchanges move towards each other. Both exchanges remain unlicensed, unregulated, and are (since they're secretly controlled by me and I'm up to all kinds of naughtiness behind the scenes) a cartel of two exchanges.

Honestly, this is not the smoking gun you seem to think it is. No one in the real world will look at this and assume that there is a cartel - even if there is. People will assume that this is normal - even if price manipulation is occurring.