The Wall Street Journal: The Value of BTC Is Under the Control of BotsOctober 3, 2018
The Wall Street Journal reported that the bots controlling the value of BTC aren’t new. This issue continues to draw close analysis, as it was mentioned by the SEC when it discarded many BTC ETF requested a few months ago.
President and Co-Founder of Coinlist, Andy Bromberg in an interview with WSJ stated that these bots are uncontrolled, Stefan Quin of Virgil Capital, a renowned digital currency hedge fund also commented that they make use of their own bots to combat these rival bots on dozens of exchanges all over the world. VC has built mistake handing operation to determine activities which are possibly against the law.
Virgil Capital focuses in arbitrage and recently experienced distressing bots which target specific ether trades, which leads to a significant loss. VC was checking costs from time to time searching for arbitrage odds with digital currency prices. The unreceptive bots would post to trade ethereum for a fraction of cost, prompting VC to purchase. But, after the buying process, the hostile bot will withdraw its sell order. Thus, VC posted buy orders which never got performed that augmented the value on other digital currency exchanges.
This is what traders called spoofing, faking and canceling orders. Spoofing aim is to make the impression that the supply or demands for a digital asset are higher. Futures and stock markets banned this method many years ago, but it is confirmed that it is now happening in the world of digital currency.
The supporter of BTC who go against to the crypto rule, do not consider this manipulation as off beam. Kjetil Eilersten, a famous crypto trader created a software Quatloo Trader, market manipulation device. In an interview, Eilersten believes that it’s useless to ban controlling cryptocurrencies. It is better to give clean handling techniques to traders to level the playing arena, he added. He believes that when everyone controls, no one controls.
Bot also allow pump and dump methods wherein traders promote a price before dumping it in order to gain. Those speculators who purchased at the highest value finish up losing a considerable amount of money.
According to regulators, U.S Justice Department and The Commodities Futures Trading Commission (CFTC) are looking into digital currency control, while the latter has been combating the issuing of a fake token. This organization has published a warning about the schemes mentioned involving digital assets and has offered rewards for those who can give proof of such wrongdoings.