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Edited by Kamal531 at 22-12-2023 02:06 PM
The Wall Street Journal reveals that Bitcoin price is manipulated by trading bots.
The Wall Street Journal reports that Bitcoin prices are manipulated by trading bots. Virgil, a company specializing in arbitrage, invested in certain Ethereum trades earlier this year but suffered losses due to harassing bots. The company monitored prices every minute, looking for arbitrage opportunities in cryptocurrency prices. However, hostile bots posted prices lower than those of other sellers and placed orders to sell Ethereum, prompting Virgil to attempt to buy. However, the bots would cancel their sell orders just before Virgil completed the purchase. As a result, Virgil's buy orders were never executed but increased the prices for other trades. This practice of placing fake orders and then canceling them is called spoofing, and it aims to create an impression of higher asset supply or demand than what exists in reality. The United States futures and stock markets banned this practice in 2010, but allegations of such operations have persisted in the cryptocurrency market for a long time.
Some Bitcoin supporters who oppose cryptocurrency regulation don't see market manipulation as wrong and openly support it. Trader Kjetil Eilersten developed a program called Quatloo Trader, which he claims is a leading tool for manipulating cryptocurrency markets. He believes that banning manipulation of digital currencies is pointless and that providing sophisticated manipulation tools for small traders to balance the cryptocurrency trading environment is a better approach. He argues that if everyone manipulates, then no one is manipulating.
Other cryptocurrency traders view manipulation as harmful to the adoption of cryptocurrencies. Bots can also be used for pump-and-dump schemes, where traders artificially inflate the price of a cryptocurrency before selling it to make a profit, causing the most significant losses for those who bought in at a high price. Quatloo Trader has a whale tool, and one of these tools, ping pong, allows users to execute their buy and sell orders, creating an illusion of active cryptocurrency trading. Such wash trading is illegal in stock and futures markets.
The Wall Street Journal previously reported that cryptocurrency pump groups had at least manipulated $825 million within six months.
Regulatory authorities have taken notice of this issue. The Commodity Futures Trading Commission (CFTC) and the U.S. Department of Justice are investigating cryptocurrency manipulation, and the U.S. Securities and Exchange Commission has been combating fraudulent token issuance. The CFTC has issued specific warnings regarding manipulation in cryptocurrencies and offers rewards for whistleblowers reporting such activities. |
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Post time 9-11-2023 13:15:51
