Exchange market data manipulation bringing the whole crypto market down?

[Kakmakr]

Price manipulation is one of the reasons why the SEC is reluctant to approve Bitcoin ETF's, but that is not necessarily a bad thing.  We have had price manipulation on some less reputable exchanges for many years and this was so severe at one stage that some governments had to close down these exchanges. 

Price manipulation happens everywhere, so that's not really the main criteria for them to keep rejecting ETF's. The SEC wants to walk into an exchange office within their own jurisdiction and raid the crap out of it in order to find out who the bad actors are in case of manipulation. Currently that's near impossible since exchanges operating within the US are so called 'following' exchanges and not those that are leading the market.

The collection of current leading exchanges consists of Bitfinex, Binance, Huobi, OKEx, Bithumb. All Asian focused. No way the SEC is going to allow an ETF to come through like this.

There might be one way of doing this, that would satisfy them and that would be for these global exchanges to install the Stock exchange surveillance software that are running on all the major stock exchanges. Example, NASDAQ OMX offers a market surveillance product called SMARTS. 

https://www.investopedia.com/terms/m/marketsurveillence.asp

So this denial of these ETFs might just be a smoke screen excuse to get exchanges to install this software and to destroy Bitcoin anonymity. 

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[coinplus]

I do not think just because there is a manipulation on the exchange market data the whole market is reacting according to it. I mean I am not arguing against the fact that there is market manipulation but the manipulation of data is not the problem, the problem is the manipulation of peoples thoughts on the price trends, the price move according to what people think it will do and when you manipulate enough people to make them think the price is going down, they will sell and when they sell the price will go down, just a big whale (or group of whales) selling a tiny amount can make a snowball affect on the price.

Currently that's near impossible since exchanges operating within the US are so called 'following' exchanges and not those that are leading the market.

I understand this is kind of tug of war. Those who are following the norms of USA unable to achieve the leadership. This is the reason why Winklevoss brother's Genimi exchange is not a big hit yet again these brothers want to enter another bitcoin business i.e. ETF whereas their first venture should have been the key for second one.

[Findingnemo]

Yes this can be one of the important reason but why the users were just reacting when they see the prices on an exchange or coinmarketcap they need to analyse the prices of different sites,so the full blame go to the lazy investors so the whales are using them as trap to bag good profits.

[deisik]

I do not think just because there is a manipulation on the exchange market data the whole market is reacting according to it. I mean I am not arguing against the fact that there is market manipulation but the manipulation of data is not the problem, the problem is the manipulation of peoples thoughts on the price trends, the price move according to what people think it will do and when you manipulate enough people to make them think the price is going down, they will sell and when they sell the price will go down, just a big whale (or group of whales) selling a tiny amount can make a snowball affect on the price.

The process you describe here (which is properly called crowd manipulation) exists everywhere. It is conspicuously omnipresent in politics since ancient times. The methods and instruments developed and sharpened there through millenia are working exceptionally well with financial markets too. In fact, I would even say that in this field specifically they are working even better than elsewhere because people here are easily susceptible to fear, uncertainty, anxiety, doubt, i.e. everything which promotes successful manipulation

So no surprise that people get manipulated constantly

[prokerduit]

it's very difficult to stop it, because that is part of the team market's strategy. indeed, coinmarketcap is the best and most trusted in my opinion, the data from coinmarketcap is very clear and detailed

[Viviornitier]

we still have fiat currency as well. An economic collapse with the magnitude to make the dollar or euro worthless will equally make bitcoin worthless.

[ObsidianCharlie]

we still have fiat currency as well. An economic collapse with the magnitude to make the dollar or euro worthless will equally make bitcoin worthless.

Or it may make it worthy. Transferring your assets into crypto when fiat is becoming worth less makes perfect sens imho. If others think like that, too, this would increase bitcoin price.

[1Referee]

There might be one way of doing this, that would satisfy them and that would be for these global exchanges to install the Stock exchange surveillance software that are running on all the major stock exchanges. Example, NASDAQ OMX offers a market surveillance product called SMARTS. 

https://www.investopedia.com/terms/m/marketsurveillence.asp

It's not going to combat bad actors operating on exchanges outside the reach of US regulators, because all the action happens in Asia. You can already see that the regulated exchanges within the US have turned into brave kiddies not doing much wrong. Their volumes have gone down significantly due to how there is more regulative oversight now.

So this denial of these ETFs might just be a smoke screen excuse to get exchanges to install this software and to destroy Bitcoin anonymity. 

People using exchanges don't have any anonymity to begin with, so what's not there can't be destroyed.

You know what I consider to be a smoke screen excuse? All these sudden changes to grant governments more precious information about users. We don't know how much of people's information has been given to governments already in the last couple of years. It's surely more than enough to prosecute ignorant large holders if they want to.

[carlisle1]

I don't wanna speculate and I don’t want to bring burden to my mind by thinking whats the reason and so and sk,because i trust cryptocurrency and most specially bitcoin.i will be contented on whats the value now and besides i can still make some income even this market drops more than grows

[gabmen]

Yes this can be one of the important reason but why the users were just reacting when they see the prices on an exchange or coinmarketcap they need to analyse the prices of different sites,so the full blame go to the lazy investors so the whales are using them as trap to bag good profits.

Exactly. That's why i don't really rely on just onr exchange since they don't have the same value for all the coins they have from other exchanges. I learned this a long time ago when it was still sensible to buy one coin from one site and sell it in another.

[btccrusher]

The top cryptocurrency exchange like OKex, Huobi and many more are actually misleading the market with fake trade volume/ non-existent trades. In coimarketcap they are in top five exchange but it is pathetic to know that they are fake. The crypto trader Sylvain Ribes accusing that 93% of trade volume is fake. What do you think? Here is a link for his explanation and analysis https://medium.com/@sylvainartplayribes/chasing-fake-volume-a-crypto-plague-ea1a3c1e0b5e

[shinharu10282016]

We can't really hold true of anything the market has going through up until now. Why do I say that? Many people are so into pumps and dumps, news agencies spreading quotes by many rich people like Elon Musk and the likes, how the CEO of this company says crypto is dumb and people are all going panicky about these. Why are we so easily swayed by this? Why do we keep being involved in this? If you think you can get rich by holding certain crypto then do it. In this world, you have no one to trust but yourself. The market is down because of many reasons and people are swayed by it. That is why the market is down.

[darkangel11]

Personally, I don't think that naked shorting makes sense unless you have insider info. I recall when a couple years ago some dude lost something like 600 bitcoins (when the price was still below $1000). He obviously expected that it wouldn't go above that mark and would soon correct, but it didn't happen and the price went exponential well beyond 1000 as we all now know. And in the end this hapless trader had his position forcefully liquidated by the exchange.

Idiot was bearish in a bull market. We were in a bull market since well below 500 USD and he didn't notice. Many people got screwed by trying to be bullish in this bear market that we're seeing right now. Trading against the trend is one the most common mistakes.
That said, my opinion is: fuck shorts, true bitcoiners go long. We need this bear market to finally end.
I've heard stories of a guy from my town who lost all his money and money borrowed from his family by trying to short with high leverage. Shorting is gambling, you're paying the house a large chunk of your money for the potential chance of a quick gain.

[timerland]

I think that the primary stakeholders with exchanges manipulating their stats would be the users themselves - they are essentially gamed into thinking that they are trading on some major exchange, while in fact their volumes are in fact, faked.

A major exchange faking their statistics would influence total bitcoin trading volume as well, probably to a lesser extent. Some people do trade bitcoin according to the volume, but I think that overall, if anything, faked volumes would in fact drives prices up somewhat instead of down. I don't think it makes much of a difference anyways.

I don't think that anyone is faking "prices", here. It's just volume, and there are no reports I could find of Bitforex faking prices altogether. The price drops we see are most likely due to regulatory concerns of Goldman Sachs and just the bear market itself, and shouldn't be affected by exchanges faking volumes per se.

[Flor1982]

I don't think this is possible because i don't think if all market exchanges can be possibly to unite just to manipulate the crypto currency prices. It will be difficult if only one market will release a false data just to manipulate the whole world wide prices but if they (market exchanges) will all conspire to do this manipulation then it will be possible.

[deisik]

Personally, I don't think that naked shorting makes sense unless you have insider info. I recall when a couple years ago some dude lost something like 600 bitcoins (when the price was still below $1000). He obviously expected that it wouldn't go above that mark and would soon correct, but it didn't happen and the price went exponential well beyond 1000 as we all now know. And in the end this hapless trader had his position forcefully liquidated by the exchange.

Idiot was bearish in a bull market. We were in a bull market since well below 500 USD and he didn't notice. Many people got screwed by trying to be bullish in this bear market that we're seeing right now. Trading against the trend is one the most common mistakes.
That said, my opinion is: fuck shorts, true bitcoiners go long. We need this bear market to finally end.
I've heard stories of a guy from my town who lost all his money and money borrowed from his family by trying to short with high leverage. Shorting is gambling, you're paying the house a large chunk of your money for the potential chance of a quick gain.

It is not like just shorting is gambling, it is all trading which is gambling unless you truly know what you are doing. And not just think you do but actually do. For example, shorts may come in quite handy. With them you can hedge against the risk of an exchange going bust provided the exchange allows margin trading in the first place (which is kind of obvious). I don't even mention a lot of other more sophisticated strategies of spreading risks over many exchanges through shorts. But these would always be covered shorts, i.e. you don't lose much however strong the market may go against you. On the other hand, reckless naked shorts are a shortcut to a disaster as many traders learned the hard way

Just because you can short doesn't mean you should

[gambitcoin53]

if this is true then it really must be stopped, faking market data is a serious crime, if you have watched the movie of leonardo di caprio, the famous pump and dump method that is artificially inflating the price just to look expensive to other players, a lot of exchanges are using this, i have no solid proof though, but i think it can happen and can be done.

[Ericgreen]

The market may continue until people finally understand how it is played and will be less inclined to sell off their bitcoins in a panic or dump in price, it will gradually become less severe as everyone will learn to ignore it.And the market will just grow naturally

People will only be able to understand anything until they start seeing the need to use it. The nature of the market currently tends towards the speculative side, and in that case for a very much decentralized market, I would not expect not to see any form of manipulation.

Manipulations are there every time for most markets and it is really nothing new like someone rightly said, and for things like this to change, this is the reason it would be more appealing to see a decentralized market get to do better in the long run with real life usage, more demand for it, and less manipulation as the case may be.

[Andrej Peiboski]

I do not see where the news is: the investors have always manipulated the markets in their favor.
Then, there are always new methods, and this could be really dangerous; however, I doubt it is really possible.

[el kaka22]

it's very difficult to stop it, because that is part of the team market's strategy. indeed, coinmarketcap is the best and most trusted in my opinion, the data from coinmarketcap is very clear and detailed

It is a general thing in any market and as long as you will keep having people with big stash of the money, there will always be market makers who are simply the ones driving the price in the way they want or simply suit them or how the market is currently perceived. This kind of thing is generally curtailed to an extent in a stock market and even though it is not allowed as it is against the rule, it still happens even though on a little scale.

Let alone, for a market that is totally decentralized, no regulation, and so on, then that is just like an open target for the whales.