Is CoinBase manipulating the market?

[ChinaCoiner]

I've been on coinbase for a while, and up till now, they've pretty much been in lock-step with Bitstamp for current buy prices. Suddenly they're asking about + $30 per coin compared to Bitstamp and Bitpay BBB prices.

When the price was at 690 on Bitstamp and I was considering buying another coin or two, Coinbase was asking 720. Then about an hour into that, there was a huge buy on Bitstamp, and suddenly the Bitstamp prices 'was actually' 720.  Now the Bitstamp price around 718 and Coinbase is asking 748. Still a $30 dollar spread. What's up with that? They're very cagey for answering inquiries on how they set their price, giving vague answers and not aswering more pointed questions.

I guess I'm not really complaining if they're manipulating the market in the up direction. Though it would have been nice to pick up a coin or so at the actual low of 690 a few hours ago.

[wonko]

My guess is that when coinbase dipped a big buyer on coinbase put in a huge buy order, this would inflate the coinbase price before any other markets (although with that spread, people performing arbitrage should get it back to normal pretty quickly)

[ChinaCoiner]

My guess is that when coinbase dipped a big buyer on coinbase put in a huge buy order, this would inflate the coinbase price before any other markets (although with that spread, people performing arbitrage should get it back to normal pretty quickly)

Yeah, they're saying they base their prices on orders on there own site, plus current prices on un-named exchanges. Most of the data for buys and sells on their site are hidden or obsured in low resolution charts. Doesn't this look wrong? lol

https://i.imgur.com/tQwMIfB.jpg

[j3steven]

Ive been watching the exchanges for most of the day today....Bitstamp, Coinbase, BTC-E, and I will throw in Mtgox but cmon.

Anyways, there hasn't been a time where Coinbase has been close to the other markets.   The closest I saw it is probably right now at about a +$20 difference, but saw it as high as a +$45 difference.  There was a point where the 3 other markets were trending down and Coinbase was trending up.

Maybe they are hedging their bets with the possible news?  Who news, it's all so speculative..

[j3steven]

FWIW....

http://www.reddit.com/r/CoinBase/comments/1xek7t/why_is_coinbase_buy_price_so_much_higher_than/

[Cubic Earth]

FWIW....

http://www.reddit.com/r/CoinBase/comments/1xek7t/why_is_coinbase_buy_price_so_much_higher_than/

Most of the discussion on that Reddit thread is uninformed crap.  For a variety of reasons, it is completely reasonable to expect there to be different supply / demand equilibrium in different global markets.  Arbitrage should equalize the global differences, but sometimes there is not enough capacity in the arbitrage channels to equalize big differences.  By that I mean the FIAT cannot move fast enough around the world.  In an attempt to not run out of coins for sale, Coinbase had to raise their buy and sell prices.  I had a pile of cash on Bitstamp that had been sitting there for quite some time.  When I saw the favorable spread, I quickly bought coins on Bitstamp and sent them over to Coinbase to sell them for a higher price, thereby 'delivering' coins to Coinbase, who in turn could 'deliver' them to its customers.  Coinbase makes their 1% as always, their customers enjoy the convenience  and safety of a U.S. based, ACH-bank linked broker, and arbitrageurs like myself enjoy a little payday for the risk and hassle we incur by setting up accounts with foreign excahnges AND by leaving money sitting there for a long time.  For example, the money I had on Gox is not doing so well these days.

But, someone has to take the risk of leaving money or coins on exchanges.  If the was no buffer, we would see some really crazy volatility. 

[ChinaCoiner]

Most of the discussion on that Reddit thread is uninformed crap.  For a variety of reasons, it is completely reasonable to expect there to be different supply / demand equilibrium in different global markets.  Arbitrage should equalize the global differences, but sometimes there is not enough capacity in the arbitrage channels to equalize big differences.  By that I mean the FIAT cannot move fast enough around the world.  In an attempt to not run out of coins for sale, Coinbase had to raise their buy and sell prices.  I had a pile of cash on Bitstamp that had been sitting there for quite some time.  When I saw the favorable spread, I quickly bought coins on Bitstamp and sent them over to Coinbase to sell them for a higher price, thereby 'delivering' coins to Coinbase, who in turn could 'deliver' them to its customers.  Coinbase makes their 1% as always, their customers enjoy the convenience  and safety of a U.S. based, ACH-bank linked broker, and arbitrageurs like myself enjoy a little payday for the risk and hassle we incur by setting up accounts with foreign excahnges AND by leaving money sitting there for a long time.  For example, the money I had on Gox is not doing so well these days.

But, someone has to take the risk of leaving money or coins on exchanges.  If the was no buffer, we would see some really crazy volatility. 

Yeah, I really don't have a problem with what Coinbase did/had to do. Congrats to you, that you were in a position to make money on the situation.

What does bother me, is my email to support was answered with a half-truth reply. Don't they know the truth will set you free? I would have much more satisfied with the publicly released explanation...

"Hello and thank you for contacting Coinbase support!

 Our price is based on both our own internal pending orders from users buying and selling on Coinbase as well a weighted average price on several different bitcoin exchanges. So the price on Coinbase may differ from one particular bitcoin exchange but is correlated to the price on any major bitcoin exchange in the long term.

 I hope this answers your question!"

[CrashX]

I my self use Coinbase, they are legit.

They give you a fair price. The way they value the price, is how many people are Buying and how many people are Selling.

The Price increase, may be because they are the only company that you could purchase quickly vs. other companies.

[PRJGen_bit]

Coinbase are not "legit".   "Legit" is a "carder word" used by criminals and low-lifes.  """I be LEGIT, bro!"    They can't speak correctly so they say sentences like "Oh, dey be Legit, broooooo!"   

Coinbase are a scam, plain and simple.  They will look for any reason at all to lock your account, freeze your coins, return your ACH 7 days later, give you a requoted bad price, etc...   stay away from them.  Go with a "real" btc exchange overseas (but of course not Gox).


Coinbase have many trolls on this board hyping their services with words like "I've tried coinbase and they're great".


-Pffft.

[CrashX]

Coinbase are not "legit".   "Legit" is a "carder word" used by criminals and low-lifes.  """I be LEGIT, bro!"    They can't speak correctly so they say sentences like "Oh, dey be Legit, broooooo!"   

Coinbase are a scam, plain and simple.  They will look for any reason at all to lock your account, freeze your coins, return your ACH 7 days later, give you a requoted bad price, etc...   stay away from them.  Go with a "real" btc exchange overseas (but of course not Gox).


Coinbase have many trolls on this board hyping their services with words like "I've tried coinbase and they're great".


-Pffft.

I haven been using them for a while, no problem. For Buying and Selling, the money is deposit very fast (3Days), and the buying part take a little longer.

The only down fall, is you could only Buy or Sell 50 BTC

If you are verified, you should be good.


As for an exchange, I use BTC-e, for my trading.  If you have doubts about me, ask about on BTC-e troll box.