Author Archives: Julia Wheeler

Bitcoin Market Debacle: Coinbase Pro Goes Down, Price Goes Wild

What a day it’s been for the Bitcoin and cryptocurrency markets. Thursday saw the leading cryptocurrency trade at some absurd levels on some leading platforms due to an array of technological patterns.

Some say that this decimates any chances of a Bitcoin exchange-traded fund (ETF) making it to market, at least in the U.S. anyway.

Bitcoin Market Goes Wild

On Thursday afternoon, Coinbase Pro, the third-largest ‘legitimate’ Bitcoin spot exchange in the industry, suddenly went down. Some facets of the site, according to traders on Twitter and Coinbase’s status page, suddenly stopped working, namely the firm’s Bitcoin-to-U.S. dollar market. There were also reports of a flash crash on the exchange of up to $200.

At the same time, certain Bitcoin markets started to print very weird chart patterns on short-term time frames. Below is an image posted by a cryptocurrency trader, which shows that the price of Bitcoin on exchanges like BitMEX and OkCoin found themselves oscillating in a weird pattern, surging higher and crashing by dozens of dollars minute in, minute out, all without rhyme or reason. The person that posted this image called the price action ‘whipsaw[ing]’ – whatever that means.

Some claimed that this was some algorithmic trading accounts ‘going wild’ due to Coinbase Pro ‘s technical difficulties, while others claimed that this was some odd attempt at manipulation as the monthly October candle was coming to a close.

Eventually, this odd price action stopped. But, the craziness was not over the users of Deribit, a popular cryptocurrency derivatives platform used to apply leverage to trades.
At 21:00 UTC, its perpetual Bitcoin swap product, Bitcoin’s price dumped to $7,700 – some 15% lower than market prices at the time – within a few seconds’ time. This wasn’t just a visual glitch, as users reported that their open positions acted in odd ways around the time of the crash.

Due to the timing of all this, some drew connections between Coinbase Pro’s sudden downtime and the collapse in the price of the Deribit market. It isn’t clear if this is the case, yet Deribit announced that this flash crash was a byproduct of calculation issues with its Bitcoin price index – Coinbase is notably one of the markets that Deribit draws information from to comprise its index.

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Bybit hits $8k in least.@BTSEcom hits $15k afterward $6.5k (lol)

– sicarious (@Sicarious_) October 31, 2019 Bitcoin ETF? During the same time interval, there was supposedly (according to prominent trader Sicarious) absurd price action on other trades, including a move from $9,000 to $15,000 to $6,500 on a single trade. Matters Are Returning to Regular

Am I missing anything? #bitcoin

As aforementioned, this industry-wide debacle probably has not helped the odds that a Bitcoin ETF has at making it past the U.S. Securities and Exchange Commission’s (SEC) gauntlet. In September, Jay Clayton, the SEC’s chairman, argued that’there is still work left to be done’ for this class of solutions. Clayton proceeded to double back on his ordinary critiques of the cryptocurrency market, casting doubt on the nature of Bitcoin’s inherent economy as BTC’trades on largely unregulated [and unsurveyed] markets,’ and might thus potentially be subject to or already subject to market manipulation.

In summation:

While this strange collection of events still rattles many, things are returning to normal. Coinbase Pro now has an Bitcoin market that is energetic , albeit with a more than one hour gap of no trading in its own chart. And Deribit has shown that it will be reimbursing over $1.3 million worth of Bitcoin to traders with losses’from the BTC index calculation data difficulty across 21:00 UTC on October 31, 2019. The Deribit Insurance finance will not be used to cover such losses, but Deribit will covers compensation.’ Sure, this might not have been manipulation, but it is not a indication that the Bitcoin marketplace is prepared for retail investors and large institutions to start siphoning capital into the space.

Coinbase goes down and whipsaw algo that is bizarre shows on the 1m charts.@DeribitExchange yolo dumps to $7200

Bitcoin Fixes This: Bank Account Affiliated With Hong Kong Protests Banned

The movement for democracy in Hong Kong has continued into its fifth month. The tussles between the Hong Kong authorities and the protesters have become more violent, with both sides using escalating force to try and accomplish their goals.

And while much of the fight is physical – just look to the television feeds of Molotov cocktails, tear gas, barricades, water cannons, and so on and so forth – a report has indicated that the Hong Kong protests are starting to materialize in the realm of finance.

According to a report from the Hong Kong Economic Journal published on Monday morning, a Chinese language daily newspaper published in the Chinese regions of Hong Kong and Macau, Hongkong and Shanghai Banking Corporation (HSBC) has just cancelled a ‘business account that has been used during crowdfunding for protest activities, because the use of the account does not conform with the stated purpose when the account was opened.’

HKEJ reports that HSBC has cancelled a business account that has been used during crowdfunding for protest activities, because the use of the account does not conform with the stated purpose when the account was opened

– Aaron Mc Nicholas (@aaronMCN) November 18, 2019

Notably, a protest group that uses HSBC has claimed that its account remains functional. Though, many in the cryptocurrency community, including popular commentator Rhythm, have said that ‘Bitcoin fixes this.’

Bitcoin Value Proven by Hong Kong Protests

And sure it does. No central authority, as long as you’re using the right cryptocurrency wallet, can close your account or addresses. In fact, anyone, anywhere, with a connection to the internet and a smart device, can download a Bitcoin wallet, and start transacting from there.

In other words, the group using the purportedly banned HSBC account would not have the same problems if they were using Bitcoin.

This isn’t the first time that Bitcoin, or decentralized money in general, seemed useful for Hong Kong’s many activists. Per previous reports from Blockonomi, in October there was a pseudo-bank run, with local media reporting that citizens of the region have flooded ATMs to secure their wealth.

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And it would appear that some people are taking notice of the worth in Hong Kong of Bitcoin. This season, LocalBitcoins watched a record week, together with Hong Kong dollar volumes reaching an all-time high.

Adoption Has Begun Bitcoin fixes this problem in Hong Kong because cryptocurrencies, if utilized properly, allow one to always have control over their riches, making bank runs impossible. Bitcoin is tough to be seized by political agencies also.

In addition, the Hong Kong Free Press (HKFP), a crowd-funded media outlet made to counter the erosion of their freedom of the media in Hong Kong, has doubled back on its support for Bitcoin contributions. In fact, the socket adopted’donations via BTCPay [to] help permit readers to make fully anonymous contribution and eliminate processing fees.’ This is relevant because asset seizure has turned into a relevant concern with protesters due to the activation of the Emergency Regulations Ordinance, which permits the Hong Kong authorities to’create any regulations at all’ that may be in the’public’s attention’ if tasked with fixing’an occasion of emergency or public danger.’ The issue is, that there have been multiple reports that the ATMs have been operating out of money, as most banks closed due to vandalism or are shut down.