BTC Futures Manipulation

[QEHedge]

Hey everyone. I wanted to get your take on this because i want to figure out how it works exactly.

So BTC futures is betting on the price of BTC going up or down (Long or short)

So lets say someone who has 1B in USD funds and they buy 1B worth of BTC on an exchange such as Binance or Kraken etc.

And if they were to long the price of BTC BEFORE buying up all of those BTC @ 100x leverage

So lets say they have 100BTC Long position using 100x leverage , and they buy up 1B worth of BTC on an exchange , and the price of BTC goes up lets say 1% , would that mean that they would double their original Long BTC position from 100 -> 200 BTC?

And then when they do that, could they short it using 100x leverage and sell all of their BTC at the same time and make the price fall to liquidate all of the Long positions to net them 400 BTC (Assuming they used their 200 BTC from their long position to open a short position?)

Is this illegal in any way at this point in time? And if this is legal , Whats to stop people with lots of money to do this?

Is this why the price of BTC is down because there are people doing this?

And if this is the case , how can we stop people from doing this or is there no other way around this?

[cryptoangel]

Future manipulation is unpredictable on anyone. Because BTC is a decentralized platform so huge investors are easily manipulate the BTC. Nowadays market stability is depends on BTC pump and dump so we can survive any situation because of crypto potential. I hope every year some countries are legalised in BTC so every year we some positive uptrend. Once it will globalized, manipulation will never occur.

[FeiYun2112]

Big whale can manipulate coin price easily especially during non peak period eg. holiday season or midnight when everyone sleeping. They just need to pump or dump BTC for few minutes to make good fortune.

[wajik-tempe]

Future manipulation is unpredictable on anyone. Because BTC is a decentralized platform so huge investors are easily manipulate the BTC. Nowadays market stability is depends on BTC pump and dump so we can survive any situation because of crypto potential. I hope every year some countries are legalised in BTC so every year we some positive uptrend. Once it will globalized, manipulation will never occur.

Manipulation by price pump and dump will be always happen because there are already too many people are holding thousands BTC and i'm sure they're making a group of people who can control market movement. I'm sure a big group of whales could posses 1 mil BTC and when they move the market must be going crazy either it's pump or dump

[ultrloa]

Future manipulation is unpredictable on anyone. Because BTC is a decentralized platform so huge investors are easily manipulate the BTC. Nowadays market stability is depends on BTC pump and dump so we can survive any situation because of crypto potential. I hope every year some countries are legalised in BTC so every year we some positive uptrend. Once it will globalized, manipulation will never occur.

Manipulation by price pump and dump will be always happen because there are already too many people are holding thousands BTC and i'm sure they're making a group of people who can control market movement. I'm sure a big group of whales could posses 1 mil BTC and when they move the market must be going crazy either it's pump or dump

There are types of manipulation exist and those are controlling the price and manipulating the fuds, And I don't literally believe on price manipulation by having a millions of btc since for sure there's no people hold that and the strongest fact there is maybe they are riding the fuds to lower down the demands that's why we can see those fake and other bad news coming just to make the price of the bitcoins cheaper and those rich guys can buy and earn on the next pump wave.

[exstasie]

So lets say they have 100BTC Long position using 100x leverage , and they buy up 1B worth of BTC on an exchange , and the price of BTC goes up lets say 1% , would that mean that they would double their original Long BTC position from 100 -> 200 BTC?

Basically, yes. 100x leverage means it takes 1% to trigger liquidation or 1% to double your capital.

And then when they do that, could they short it using 100x leverage and sell all of their BTC at the same time and make the price fall to liquidate all of the Long positions to net them 400 BTC (Assuming they used their 200 BTC from their long position to open a short position?)

Yes, but the mistake people make is assuming whales are always successful when they try to push the market around like that. I've seen many whales attempt large spot dumps that were instantly swallowed by the market before a move up. Those whales lost a shitload of coins. Some of them likely ceased to be whales altogether because of it.

Consider the Bitstamp bear whale. He dumped 30,000 BTC at $300 when the rest of the market was trading ~$50 higher. The market bought all his BTC then rallied to $450. He returned in 2017 as a bull, signing messages to prove it. So he dumped everything at $300 and bought back during the 2017 bubble.

He's not the only whale to make mistakes like that. They are not infallible!

Is this illegal in any way at this point in time?

I don't believe so, at least not in countries like the US. It doesn't fall under any of the market manipulation laws I'm aware of. If BTC were a security and manipulators were engaging in misinformation campaigns, this sort of activity might qualify as illegal "pump and dump" or "short and distort" schemes handled by the SEC.

[bangjoe]

futures also need a strategy or they will face liquidation. the futures system is still legal for now, opening long positions for a short time to make a profit, and then opening short positions at the same time does not break the rules at all, whales with 1B funds may not trade all at once, 90% will actually be made for positions annual length and the remainder for daily positions, the system also continues to set Mark prices to suppress manipulation. their strategy also remains risky if it is certain to fail because they are not the only whales that play there.

[Wexnident]

There isn't really anything illegal with it, since that's how BTC futures work, but manipulation like that isn't that easy to perform, even if you have a large number of funds at hand. If that kind of action was illegal, then they should just remove the feature altogether since it already defeats the purpose of it once they ban it like that. BTC price drops because supply is greater than demand, that's it. If people demanded more BTC, price naturally goes up. Even if whales suddenly dumped coins, demand would naturally eat it up and the price would naturally go back to its natural state, but it would probably take up a bit of time.

[panganib999]

It's legal yes, and no you can't do anything to stop it if anyone can actually successfully 100% manipulate the market. Though I think such cases of manipulation are rare, and even if there was, there would only be a small margin of difference from the normal state of the market since it would probably require an astronomic amount of money to do as such. Though maybe some people who profit off of Futures actually just have a legit strategy and analysis that they can easily do as such. There's close to no way to differentiate between the two since anyone putting BTC to volumes is anonymous, so if it was illegal, then everyone might have been labeled as such.

[nicolas1979]

Manipulation is an old topic but always exciting to discuss, every person with big fund can do that and small trader is the victim. Create bait with large fund to invite people to replace open position and take the money away, that's bad habit. The problem is we can't detect manipulation and avoid it is impossible. When people say no one can't control market movement that's wrong, whales only need create bait and make sure people see it as good opportunity to make transactions.

[el kaka22]

Not that anyone with one billion dollars would ever go into future manipulation like that because we are talking about hundreds of millions of dollars lost if they can't do what they are trying to do, don't get me wrong it may sound easy to you but this is a market with billions of dollars of volume and there is a high chance you can achieve what you are trying to do if you have one billion dollars but on the off chance you fail, that is hundreds of millions of dollars, not hundreds of dollars.

However, even if they want to do what you are saying, they have to first buy a lot of bitcoin before buying long, you need bitcoin to buy bitcoin long anyway, so they can only buy a lot of bitcoin after the long with whatever is left, same with buying short futures with bitcoin as well, then sell the rest, so they can't do huge moves with one swift motion, they have to keep putting it into two different things.

[Amel]

Conceptually from decentralization, such a thing is legal because there are no binding regulations in trade like fiat. So every trader is free to trade in his own way, yeah it's a bit like manipulation and monopolizing the market for the whales, but it's a fact that this is legal in the crypto market and this has been done since bitcoin was traded.

[xZork]

Future manipulation is unpredictable on anyone. Because BTC is a decentralized platform so huge investors are easily manipulate the BTC. Nowadays market stability is depends on BTC pump and dump so we can survive any situation because of crypto potential. I hope every year some countries are legalised in BTC so every year we some positive uptrend. Once it will globalized, manipulation will never occur.

Manipulation by price pump and dump will be always happen because there are already too many people are holding thousands BTC and i'm sure they're making a group of people who can control market movement. I'm sure a big group of whales could posses 1 mil BTC and when they move the market must be going crazy either it's pump or dump

Sharks always manipulate the price of bitcoin and people cannot fight them. The way they manipulate the market through the news, if they want prices to rise they will launch good news and vice versa if they want prices to fall they will launch bad news.

[BChydro]

~snip
So BTC futures is betting on the price of BTC going up or down (Long or short)

Future markets can be manipulated and that is not the case with bitcoin market alone it is the same with the rest of the market as well as the investors with huge amount can always manipulate the market.
 

Is this illegal in any way at this point in time? And if this is legal , Whats to stop people with lots of money to do this?

In regulated market if there is an organized manipulation then the authorities will fine them huge amounts and since the bitcoin market is not regulated whales have the freedom to do anything as long as there is no regulation in the market.

[Capt00]

It is possible to see more market manipulation will arise in the future but most likely it happens to centralize coin and not for Bitcoin.
I could foresee that Bitcoin will remain as what it has today. Volatility is not a question anymore and can't be considered as the effect of market manipulation cause even we think that whales could change the trend but it is just got temporarily, they can't still control Bitcoin's movement.

[vennali]

Well, the way you explain it, it is possible with every stock or cryptocurrency. Manipulation is always a possibility but the odds of that happening is a bit low or the extent of the possibility of making huge swings is not that high. A lot of BTC is kept on HODL, according to recent reports, $100 Billion worth of BTC hasnt even moved since 2017. So, the manipulation chances are a bit lower coz of it.

[leyton11]

Hey everyone. I wanted to get your take on this because i want to figure out how it works exactly.

So BTC futures is betting on the price of BTC going up or down (Long or short)

So lets say someone who has 1B in USD funds and they buy 1B worth of BTC on an exchange such as Binance or Kraken etc.

And if they were to long the price of BTC BEFORE buying up all of those BTC @ 100x leverage

So lets say they have 100BTC Long position using 100x leverage , and they buy up 1B worth of BTC on an exchange , and the price of BTC goes up lets say 1% , would that mean that they would double their original Long BTC position from 100 -> 200 BTC?

And then when they do that, could they short it using 100x leverage and sell all of their BTC at the same time and make the price fall to liquidate all of the Long positions to net them 400 BTC (Assuming they used their 200 BTC from their long position to open a short position?)

Is this illegal in any way at this point in time? And if this is legal , Whats to stop people with lots of money to do this?

Is this why the price of BTC is down because there are people doing this?

And if this is the case , how can we stop people from doing this or is there no other way around this?

oh, this is a problem that everyone has known for a long time since many exchanges opened margin trading and futures. This is completely real and it happens at Bitmex a lot. You can see many of the Kill Long and Kill Short whales within 2 hours and people often burn their accounts a lot. In fact exchange and whales are one organization and they have enough capital to manipulate the whole market if they feel the buying or selling force is diminishing.
Since this is a decentralized market, we do not have SEC protection of manipulations, so we need to be careful

[3la9l_kolbaCa]

Well, the way you explain it, it is possible with every stock or cryptocurrency. Manipulation is always a possibility but the odds of that happening is a bit low or the extent of the possibility of making huge swings is not that high. A lot of BTC is kept on HODL, according to recent reports, $100 Billion worth of BTC hasnt even moved since 2017. So, the manipulation chances are a bit lower coz of it.

This is reality, and we can't be serious for that manipulation dominated our market price nowadays. Holders remain calm at this moment while fears of dumps will be possible at any random situations, that because sellers are waiting for another some spikes of btc price. Huge btc holdings are still in the whales, we should wait until such time the market is freed from bearish trend.

[leyton11]

Big whale can manipulate coin price easily especially during non peak period eg. holiday season or midnight when everyone sleeping. They just need to pump or dump BTC for few minutes to make good fortune.

yes, they are most active at the time we sleep so that the volume can be reduced to a minimum and they can manipulate a lot easier. I feel this is one of the actions that should be condemned in this market and traders really need to be protected. As for the derivative market, we only have to fight with other small traders, so our account is less risky when confronting with the stalking sharks. or we should only trade in the morning, when everyone wakes up and the market works normally it will be safer. haizz, trading in crypto market is so hard.

[wajik-tempe]

Big whale can manipulate coin price easily especially during non peak period eg. holiday season or midnight when everyone sleeping. They just need to pump or dump BTC for few minutes to make good fortune.

I'm curious why the whales is determinated midnight while cryptocurrency is worldwide and the users are coming from different timezone
I think they will pump it on random time, even when people are expecting a big pump and a bull run, they could dump it because they owned a lot of btcs and crypto assets