My conspiracy theory based on some observations of the btc markets.

[Przemax]

As the title suggest, my ideas are to be taken as a speculation only.

I've made some observations on a mechanism I've made money on. There is a pattern of price differentiation between the PLN (polish currency) bitcoin exchanges and some major ones like bitstamp and kraken. What I have noticed is that when price is about to drop in a matter of week or so, the price on polish exchanges are way higher compared to the more popular exchanges. When the price is about to rise again, the price of bitcoins in polish currency is getting similiar to the popular exchanges (in pln to usd/eur ratio).

I have a theory that some entity is buying the bitcoins on some less popular exchanges not to increase the price. Later on the same entity is droping the same bitcoins on popular exchanges to artificialy lower the price.

Ofcourse it could be only a mechanism of having less money on the less popular exchanges, but the price differences are too big imho for it to be a normal market behaviour.

What do you guys think? Have you observed the same pattern somewhere else?

[pooya87]

when price is going up, back when it was $1250 and rising, people rush to buy more bitcoin and when an exchange have a low volume the price goes up much easier when the demand increases suddenly. and it usually is much higher in different currencies than USD because of this sudden demand rise. and when price becomes more stable the price in X currency becomes more stable and with balance to USD price too. as you can see it is ~$1058 in PLN while price is $1043 in USD

and when it drops the same thing can happen.

but there will always be some delay between exchanges in different currencies specially if they have low volume Like coinfloor ($73K) because people usually use these to buy bitcoin not so much to trade it.

- just my theory though

[alyssa85]

Low volume exchanges have higher prices. Also - exchanges in places where there are capital controls (like India) have higher prices.

The differences are because it is hard to arbitrage. In the case of capital controls, you can't get your fiat out. And in the low volume exchanges, you can't profit because the volume is so low that no-one eats up your sell orders.

[tk3609]

How about a theory that Poles are bad traders?

Jokes aside, Poland have one of the highest number of educated people that are fond of new technologies. The demand in unsure times is higher than in the west.

[Przemax]

How about a theory that Poles are bad traders?

Jokes aside, Poland have one of the highest number of educated people that are fond of new technologies. The demand in unsure times is higher than in the west.

Yes sure. The racist theory seems always valid. Its always wrong though. Even the black people are made mess with their economies by predatory enitities like IMF that had made a tone load of unpayable loans unto them.

More demand from Poles might be the case. Sure. But it does not explain why most of the time PLN/BTC and USD/BTC are almost even. Sometimes the price happened to be realy weird like 60 usd difference in value for the same bitcoin. And it was usualy just before the dumping of bitcoins on some big exchange.

Low volume exchanges have higher prices

That is the point of this topic. But why is that? Saying that there is not enough liquidity is a double edge sword. Why would they be higher instead of lower. That seems logical, but its just an illusion of an argument.

Also - exchanges in places where there are capital controls (like India) have higher prices.

That is not the case here with Poland.

The differences are because it is hard to arbitrage.

I wouldn't say its hard to arbitrage. Ofcourse its harder to arbitrage changing one currency to another. But there will always be someone willing to make few bucks on arbitrage like myself so eventualy the price should even itself out. Thats why I think the market is manipulated to keep the price low and that is kind of bullish imho.

[SONG GEET]

I have a theory that some entity is buying the bitcoins on some less popular exchanges not to increase the price. Later on the same entity is droping the same bitcoins on popular exchanges to artificialy lower the price.

I think this theory is completely wrong, whoever do this will eventually loss so much and what can be incentive to them for doing this. 

Price on local trading platform may have vast difference than in popular exchangers supporting multiple countries because of different factors and supply of bitcoin is one important factor. During demonitization of indian big notes, price on indian trading platform was 10%+ higher than normal market rate.

[bettercrypto]

I have a theory that some entity is buying the bitcoins on some less popular exchanges not to increase the price. Later on the same entity is droping the same bitcoins on popular exchanges to artificialy lower the price.

I think this theory is completely wrong, whoever do this will eventually loss so much and what can be incentive to them for doing this. 

Price on local trading platform may have vast difference than in popular exchangers supporting multiple countries because of different factors and supply of bitcoin is one important factor. During demonitization of indian big notes, price on indian trading platform was 10%+ higher than normal market rate.

I get the same assumption too.  Considering local exchanges price are way higher than the popular exchanges, i do not get the point why people will buy on the more expensive exchange and drop it to the more popular but lower market price.  It is plain lost in fund if someone do that.  And I think traders are not that dumb to buy at higher rate and then sell it to lower rate exchanges.

[X-ray]

I have a theory that some entity is buying the bitcoins on some less popular exchanges not to increase the price. Later on the same entity is droping the same bitcoins on popular exchanges to artificialy lower the price.

I think this theory is completely wrong, whoever do this will eventually loss so much and what can be incentive to them for doing this. 

Price on local trading platform may have vast difference than in popular exchangers supporting multiple countries because of different factors and supply of bitcoin is one important factor. During demonitization of indian big notes, price on indian trading platform was 10%+ higher than normal market rate.

I get the same assumption too.  Considering local exchanges price are way higher than the popular exchanges, i do not get the point why people will buy on the more expensive exchange and drop it to the more popular but lower market price.  It is plain lost in fund if someone do that.  And I think traders are not that dumb to buy at higher rate and then sell it to lower rate exchanges.

SSome of the local exchanges are having the strong support to keep the price is not down for a lot. I don't think so, Have you ever seen the people are doing a wrong arbitrage like that?

The possible thing if they are wanting to take the advantages of the market movements. I mean about the popular volume will give high traffic for the bitcoin transaction.

I might be thought if isn't possible to do arbitrage trading among the popular and the local exchange.

Some of the local exchange will tell you to prove your identity.

[york780]

Some more conspiracy for the high risk traders (gamblers) :

It looks like a new trend in the atcoins is going on, the bitcoin fork FUD pushes bitcoin look-a-like crypto's to the moon. Pump&dump style. Yesterday bitcoinplus, now Bytecoin. Also bitcoindark pumped. I am almost sure that bitcoin21 will be the next one to pump&dump with 300%. So if you like high risk short termed investment i would put my money in this one. But i would never risk such a thing, it would be madness   

[afbitcoins]

Interesting. Whatever the reasons, it seems like a good indicator to take note of though.

[york780]

Interesting. Whatever the reasons, it seems like a good indicator to take note of though.

https://coinmarketcap.com/currencies/first-bitcoin/

Looks like Firstbitcoin is pumping now. One more example of my theory. +410%

Bitcoinscript is also pumping. +30%

https://coinmarketcap.com/currencies/bitcoin-scrypt/

[alyssa85]

Low volume exchanges have higher prices

That is the point of this topic. But why is that? Saying that there is not enough liquidity is a double edge sword. Why would they be higher instead of lower. That seems logical, but its just an illusion of an argument.

Because a premium is built in for not doing business.

Suppose you have a price of $1000 on one of the big exchanges. And you place a sell order for $1000 on the Polish exchange. Because of lack of volume on the Polish exchange, your order just sits there for days. Meanwhile the price has rapidly fallen on the other exchanges to $950.

The person who has placed their order on the Polish exchange would have lost money, due to low volume and no trades, if they could only get $950. So they leave it at the original sell price.

And suddenly, you end up with the premium for low volume.

[aardvark15]

I'm not sure about this theory, but I'm sure there are people that will manipulate the price if they can. It's also smart to use multiple exchanges to get the highest price for sales and lowest price for buys. It seems that it would take a lot of work and time to do this though and moving funds around gives more fees.