EPIC Bitcoin Price Manipulation??

by birtanpublished on September 21, 2020

Oh you thought the run up to 10k would be easy right sitting from 4 K to 6 K to 8 K and we're just gonna continue to rise up huh wrong what's going on everybody it's your boy Krypto Bobby I hope you were having a great day great night wherever you're watching or

Listening in from and today a lot of interesting things to discuss and I have a number of interviews coming later from blotching week at fluidity summit that you're gonna want to check out as well but one of the big things to take a look

At right now as you can see on coin 360 we are in the red and it has been led by a Bitcoin and the thing about crypto that's interesting is when the market goes up people yell scam they yell manipulation when the market goes down

People yell scam they yell manipulation basically whatever happens people yell manipulation and most of the times it's BS and it's just people being stupid having no clue what's going on in this case it is worth diving into a little

Bit more because there is some interesting things that occurred last evening at least for me while I was sleeping on bitstamp that triggered a wild move in a crypto currency market that you need to take a look at and also

Worth considering when you might be playing around with stop-loss orders or potentially with leverage because that is something that was heavily affected last evening so we'll dive into all that and more in today's discussion

So last night the price of Bitcoin crashed about 18% on bitstamp which is a large crypto exchange that some of you might be trading on the price crashed 18 20 % why did that happen well shout out to loon dart who's watching this in real

Time he noticed that somebody put up a two thousand a Bitcoin cell wall on bitstamp and it led almost immediately to the price of Bitcoin crashing from that 7600 range all the way down to a low of 6,300 6,400 dollars or so now why

Is this notable if it's just one exchange right you might be thinking okay you know it's just bitstamp does that mean that it's happening on every other exchange well the interesting thing about bitstamp is that it is one

Of the exchanges that is utilized for the bit max xbt price index now bit max some of you might use it some of you might love it some of you might hate it and think it's the worst thing on the planet but bit max right

Now is one of the most if not the most important exchange and market in the cryptocurrency ecosystem because of how liquid it is and because of how much volume is driven on fit Max and the 50% that is right 50% of the price for the

Price index or X B T which is the trading instrument that bit max uses to replicate BTC 50% of that comes from bitstamp the other 50 percent comes from coin based Pro so if the price on bit stamp is dropping due to somebody

Putting in a massive sell order then that will be reflected that will at least be 50% reflected in the index on bit Mex so that is why that is incredibly important when you look at what happened with with the price from

Bitstamp and that led to that massive sell-off of 18% and also what occurred with that is you had a number of liquidations you had a number of people that had orders on bit max that were leveraged up and you had about 200

Million dollars worth of longs that were liquidated on bit mechs because of the start the cascading effect of this one the very large 2000 Bitcoin sell order that was placed on bitstamp so a lot of people love to kick scream

And shout manipulation when it comes down to cryptocurrency most of the time I don't necessarily think it is this is actually a case where it looks pretty clearly like a sophisticated individual or organization with enough money in the

Bank to pull this off was able to successfully game bitstamp and bit max it's kind of confusing because you have two bits but bitstamp and bit max simultaneously to affect the market in a very significant way eventually across

All exchanges because now all exchanges are down pretty substantially so it is something where you have both bit mechs and bitstamp really affecting how the rest of the markets will play out a to a to a greater effect

In Sue's new shout out the Zuzu he did a fantastic job just summarizing kind of the situation as a whole and he said looks like a Mark Price exploit by placing a large sell as we talked about on bitstamp which is one of the two

Oracle's price Oracle's for the market on bit max to trigger liquidations on pip max in effect they ended up triggering 200 million dollars of longs that got liquidated on bit max and then he goes to show that you

Actually would have been fine if you were leveraged long and some other exchanges like BitFenix which actually didn't go below six or seven thousand dollars whereas bit max went all the way down to six thousand four hundred

Dollars now we're sitting above seven thousand dollars sitting in about seven thousand one hundred dollars but the interesting point to this and shout out to Erik Connor for tweeting about this and it's interesting I think a lot of

People might argue with this but he says a well crashes the entire crypto market twenty percent in five minutes with a single sell order on the books and people think an ETF is actually coming and it is a fantastic point because when

You look at what happens you look at the argument right now for an ETF and a lot of people say when ETF when ETF and I literally sat in on a panel at consensus where Jay divinsky was moderating and there were a number of lawyers and and

Regulators that we're talking about when is the ETF coming what what is happening to perhaps ensuring ETF when will the time frame be and a number of other components around the ETF this is one of the biggest things that will likely

Prevent an ETF not just the manipulation as a whole but also the fact that in many ways bit max which is an unregulated offshore cryptocurrency exchange is one of the ones that really leads price discovery for the entire

Cryptocurrency market the other day arthur tweeted out there was ten billion dollars in daily volume on bit max which is insane it's incredible i think you tweeted that on the 12th ten billion dollars in volume on bit max on the

Twelfth it is one of the most active really the most active and i think right now the most important for bitcoin if ur aetherium and many risks exchange out there I think yet–but max then you have bye Nance and then if

You're looking at like quote-unquote legit exchanges maybe coinbase bro but even then that still follows bit max but when you look at that and you if you are a regulator and you see okay you know bitcoin is becoming more legitimate it's

Becoming maybe more regulated and we want to offer a product on it and then you say oh wow somebody just put in a 2,000 bitcoin sell order and the entire market went down 20% basically in one quick wick like what would that do for

For investors in the you know in the in a larger space how would how would that look upon us if we create an ETF where that and it probably wouldn't look too great so something to consider when you are thinking about ETFs and when you

Look at something like this now outside of the manipulation or maybe it was maybe it wasn't who knows but outside of what happened last night I have a ton more content coming for you right now from the fluidity summit during

Blockchain week in New York that is at the tail end right now but it was a really great week in summary between fluidity summit consensus had a chance to speak on a panel there there's eath New York happening tonight a lot of

Great conferences a lot of great just people in general the coolest part about blockchain week for me is not necessarily the conferences as a whole is just getting a chance to have a lot of individuals in the cryptocurrency

Space in the blockchain space in the same city at the same time and getting a chance to just meet a lot of the people that you talk to online and hang out with and see a lot of you individuals as well so shout out to everybody who I got

A chance to meet a consensus and all those other places bullets hop into the content from fluidity summit somebody who's got a chance to use Dharma before and a fan of what your team is building for anybody who doesn't know what is

Dharma yeah of course so Dharma is the easiest place to borrow and line cryptocurrency we essentially want people from anywhere in the world to either borrow with a few clicks or land in an interest with a couple of

Things and one of the interesting things you just had I think Brendan who is one of dharmas co-founders speaking earlier and talked about the kind of three different like waves or levels of adoption kind of and

Right now crypto native and then there's kind of the extended period and then at some point in time looking for like Dharma and similar types of products maybe 10 20 years out to kind of subsume legacy finance how are you working on

Just making Dharma and like the crypto ecosystem just more usable because I think you guys have done a really good job with user interface and any experience as well yeah totally so like usability and UX is like a big big focus

For us like we don't think and we love define but we don't think new users are gonna be able to kind of come in and be comfortable let's say sourcing funds from a decentralized exchange and then signing transactions on metamath we

Think it's a bit difficult for them to do so you know things like Dharma key which were essentially allowing users to sign transactions with a four-digit pin just like they would any any bank account and similar to kind of like the

Way we were think about at Dharma is we think there are sort of concentric circles of users you have like your core defy enthusiasts and then you know moving kind of further up you have let's say like coinbase users people who

Signed up with an account you know I think there's like 30 million registered users and we really do want to almost like dumb down the experience and make something that they're comfortable with and they know how to use so one thing we

Talk about a lot is like dollar denominated interest right you could lend I or USD C which we're adding soon right so now anyone in the world can now earn interest on the dollar and like Brennan said we kind of see that as like

Almost that second phase where it's like it's market expansion area right it's taking something that's relegated at define now but then making it kind of usable understandable to a more general audience and with Dharma and what you're

Building I think one of the things that a lot of people and has brought brought Dharma a ton of I think users and also kind of money within its its overall system has been people looking for yield in the cryptocurrency space and there

Has been solid yield on Dharma for products like dye and things like that can you talk a little bit about just like how maybe the market has evolved to people seeking yield on on places like Dharma

Totally so I mean yeah so our interest rates right now we are setting them and they're very much benchmark to like the stability for you right and so Dharma is actually fulfilling at a core use case that multi collateral dye supposed to

Have and that like a savings rate and yeah I mean so in multi collateral dyes was have a savings rate to essentially offset a high stability fee so higher fee would cause a higher rate and more people would buy and that would kind of

Like to bring the price back to a dollar but that doesn't exist yet today and so you know we've been lucky and that we can just charge a much higher interest rate and borrowers are willing to borrow so Leonard's on the other side canner

And fortune % on the dollar so we've kind of gotten lucky with timing but yeah like you said like yields are going up just because there is no savings rate for dyeing yeah it's been it's been really fun to watch the bank that

Competition in the like Defy space in general between what you're building what compound is building and get new o is like a newer entrant into the market and then obviously maker it's it's been fun to watch and kind of everybody just

Like upping upping the game of everyone else what's what's next for Dharma the next like say six twelve months like what are you guys really building towards yeah totally so I'd say like you know more recent features we're

Definitely gonna be adding like US DC you know we'd love to I we're big supporters of died but definitely more institutional types market makers bigger trading firms are more comfortable with us DC and you don't want to speak too

Soon but Bitcoin Bitcoin will be coming to Dharma and some in some capacity so it look out for that where are you doing venture investing and why is blockchain a consideration there it's a okay so I'll answer your first question why do

We invest in FinTech and blockchain so there's a lot of opportunity to disrupt the financial industry and there's a lot of efficiencies that we could see that if applied within our company could create a lot of synergies and revenue

Growth and happier customers that's why we're looking into this opportunist specially with fluidity factor around I would like to learn what's out there what's up and coming and maybe something that we could share within the company

That can help us look or consider our opportunity he said within the blockchain space awesome and and as you've looked at I think maybe investments in the in the greater FinTech space but also maybe in

The blockchain space are there any specific areas or efficiencies that you feel like have potentially the greatest opportunity for disruption by this type of technology it will be the privacy area because there's still lack of trust

Within transactions especially in the commercial real estate space secondaries right I think that's one I'm sure in your world you'll have more but that's one area I think that there's a great opportunity and a lot of appetite from

The investors and and I'm kind of curious of this because I just kind of like hearing it from somebody who comes from it sounds like a more traditional investing background how have how have

You been able to kind of learn and absorb the the things that are thrown at you from the blockchain space it's very I think kind of different in unique landscape like how have you kind of gone about learning and adding knowledge in

That sector yeah so I'm very privileged that I came from another corporate venture firm prior to Fitch ventures and simultaneously I was studying at Yale University were in I was really involved with our fin tech club and a PVC club so

I was able to integrate what my investor head and everyone is the curiosity aspect of my life which is what is this can you explain it to me in layman's terms and how does it apply to the use cases that I might could apply to my

Current company network for so that's how I get to learn this and realize how much this could bring or how much value it could bring to the current system or the way we do business basically and one of the things I think that has been

Really interesting as somebody with you know arguably the most prominent position in the decentralized trading ecosystem right now in aetherium is the research that came out recently with amos phil diane from cornell talking

About what is being called front-running 2.0 and you've had some interesting commentary as far as how idec's is specifically built and how that helps to mitigate a lot of those issues would love your thoughts on just like the

Hybrid decks model that you've taken and how it alleviates some of those issues yeah sure absolutely so what are the challenges when when trading on a decentralized exchange is this idea of trade execution and what entity is

Responsible for trade execution if you think about trading one of the things you want to be certain of is that when you show up and you try to buy an order that if you're the first one there you actually get that order that someone

Else can't come at a later date and jump in front of you that's the the term front running whenever you're relying on a decentralized network like the etherium network to manage trade execution you leave yourself open to the

Possibility of frontline so in this case we've actually had what you correctly described a hybrid approach where we still use a smart contract to custody funds and settle trades however the trade execution is managed

By us idec's so when users authorize trades with their private key its first executed off chain and our infrastructure another analogy is the state channel where you're signing these

Messages off chain and agreeing to these transactions and only going to the blockchain for final settlement so the end goal is that were able to keep the decentralized fun custody and trade authorization where no funds can move

Without using your private key but everything happens in real time and with certainty you don't have that risk of from yeah I think that's it's it's really interesting to watch the the narrative developing and come to light

Because I think there have been a lot of you know some some arguably some groups have like thought like like yourself I've thought ahead of time of this issue and I think some people have either you know kind of choose to ignore it in some

Respects or just downplay it and it has been really interesting to see with the research that Phil and the rest of the folks at Cornell had done you know getting mainstream press and Bloomberg and all these other places talking about

This kind of like new generation of front-running what that's done and how it's also kind of shone a light on this cottage industry of basically front-running trades on aetherium that a lot of people didn't even know existed

So it's been been really interesting to watch that develop yeah the report was really insightful is really cool see some academic rigor behind it right and what you found was people were

Getting into a bidding war paying higher and higher etherium gas prices to try to get these trades and and front run them in you're right it's been interesting to see the evolution because it's there's in some ways there's a philosophical

Kind of component to it of the level of decentralization you know people's thoughts say decentralize exchanges but really there's a ton of different parts of the exchange that can be decentralized and it's a it's not a very

Precise term and so in our case you know we admittedly are taking some elements of centralization in order to solve this problem you know so we for example are unable people are unable to trade directly with our smart contract you

Have to go through idec's so that we can then coordinate these trades and prevent the front-running so now we've you know we've kind of addressed that issue but we're now looking at other ways that we can make it more open and transparent to

Ensure users and give them the certainty that we're not doing anything malicious with the centralization that we do have yeah the point of different levels of decentralization I think is is a really good one because there are absolutely

Varying levels of decentralization and like having the like quote-unquote fully decentralized model doesn't always work the best and often sometimes opens the the consumer the actually user up to a variety of issues so it's been

Interesting to watch that develop and also just like I think a lot of you know the conversation previously was around like decentralized exchanges and now some of that conversation is even shifting to like just non-custodial like

As long as the exchange isn't necessarily holding the keys like maybe we can categorize it in that way so that's been it's been fun to watch that narrative to help and kind of see how how certain venues have have adjusted

Things what's next on the agenda for fried X and for your greater team in the next like six months to a year what are us working on yeah I think so we got a couple cool things in the pipeline so we think that

The you know in particular this research and our kind of our user adoption has borne out the idea of this hybrid model that it's a great approach to keep decent cheese as you said non-custodial right so the fun

Custody is decentralized managed via users and a smart contract but the other components are centralized for the performance and coordination benefits that it brings one of the things we're looking at is how can we reduce the cost

Of using the etherium network for custody and settlement so a fun fact in 2018 etherion miners earned a hundred and forty eight million dollars from gas fees and I'd X users paid 4.4 million dollars of those fees it's a huge cost

For using any decentralized application and an area that is a big focus of ours so we're working on a layer two solution that will essentially change the way we send information to the blockchain so that we have to do it less frequently

And with less information so that it's just a lot more cost effective to use the application we're also working on a new UI and a new UX that's informed by working in this environment over the last year and a half so you know there's

In many ways our exchanges is very similar to a centralized platform but there's other things that are very unique just given the fact that all of your actions require approval from a private key so we've got a lot of

Insights and feedback from customers that we're using and incorporating into this new design great that's that's awesome here so many updates are coming on your end and from it's the perspective and maybe that's just like a

Personal perspective but you know when you are building these things out and all these different improvements and potentially kind of layer to state channel type of improvements to kind of continually advance the user experience

Any thoughts on what's happening with the improvement of aetherium and kind of the the roadmap of like a theorem to point out do you have anything specifically that you feel like might be advantageous to to how you're building

Or to help out the the user experience for people you know trading on our decks yes so in that respect we're kind of doing a very focused layer to approach because we have a very specific use case and that really helps in terms of honing

In on the design and getting something to market relatively quickly and then you know once we get that we're going to look at how can we generalize this a little bit more you might have applicability for

More projects or even for the etherium network itself so you know I think there's an argument to be made that layer one solutions should update extremely slowly and extremely carefully especially now that there's billions of

Dollars of value on top of these networks right so you know I hear the argument for many people within the Bitcoin community that if all Bitcoin ever is is a kind of a thing of like a shipping container layer for large

Settlement transactions and everything else is done in layer 2 or centralized solutions then even that's an amazing innovation right to have this alternative reserve currency that can move large amounts of value around even

If there's the level of trust to get to the end user to for that kind of last mile of digital value so I think the same analogy could be made for a theory and I think the work they're doing on layer one is fantastic but I think a lot

Of the layer 2 stuff is progressing to the point where I hope a lot of applications will be similar to us where we don't feel so kind of handcuffed or reliant on aetherium itself late 2017 early 18 a lot of people are talking

About security tokens and like tokenizing the world and there was this big expectation that it was going to maybe happen very quickly and I think a lot of people I don't know if they have lost interest there's definitely still a

Lot of interest but like maybe it just hasn't happened as quickly as some people are expecting what do you think needs to happen for the more in-depth adoption of tokenized securities I would say that there a couple of major

Barriers that exist in the market first is lack of institutional trust and the second it's pretty closely connected it's the lack of high quality projects because the main interests that we have to deal yeah how about quality ideas so

Like you need to get investors interested but the majority of projects that we've seen to organize aren't going for stos where the ax ICO startups so quickly so it is just new opportunity for

Fundraising well place yeah there's a female like that so we need to see a lot of high quality deals to see a real businesses with profits tokenizing their equity or debt and then we'll see more

Institutional investors coming in there are a lot of amazing guys out there creating the infrastructure for this to be able to happen like they from verse Allah for example but I think it will take maybe half a year a year or so I

Think it will start seeing maybe the beginning of next year all right because we're ready for the first steps happening yeah for example in Germany for extra phase and Bank Bank they are Bank they already 820 million euros okay

Nice depth so big players are stepping in there like kind of dipping their toe some bits but it just takes time I'm excited about Portis is something I hadn't heard of until pretty recently maybe say a few months ago something

We're working with a tear swap to integrate into the platform itself and I think you guys have a really interesting problem and that is that etherium cryptocurrency in general but aetherium is difficult to use what's Portis doing

To to make a theory my 'let's go more mainstream that's a great question and I'm gonna say it's even beyond it the aim it's just blotching in general you know if you look at web 1 up to Internet and apps and mobile

Applications if you ask the everyday user how the internet works they can't answer that and Portus is really focusing on the user experience for the everyday user allowing them to be able to engage with the air swap or eat

Phenix or even like a open sea which is a marketplace for an empties so we created a platform where an individual comes to air swap if they've integrated our SDK and they put their email and password in and that encrypts the wall

Within 10 encryption and now they're able to use any gap or Dex or trading platform without knowing they even just used blockchain to sign their transaction and engage the market it's it's it's awesome and it's something

I've used and I think it does like the the primary experience for aetherium right now seems to be meta masker it's just the most adopted one but it's still like if you're not into crypto meta mask is confusing but you've kind of

Replicated the system that people are just used to on the Internet of having an email address and a password and if you forget something you know you can reset your password so I think it's really interesting and kind of novel

Approach that will hopefully open up the door for a lot more people yeah one thing about resetting and password we're non-custodial so we can't actually reset passwords but if they back with their private keys and or if they host

On the cloud whether it's going to be Google or iCloud they'll be able to have their password saved but yeah it's madam asked as a pain in the butt if you ask anyone listens you came out with instructions that says to

Use us you need to download madam asked me and use Madame s and you're gonna be locked in on one device that's a huge barrier to enter the market as being able use any device any web browser to be able to login and use yours well and

It's it's funny that you bring it up to because any Thursday there's an infographic somewhere that says the steps that are required to utilize adapt right now and it's like by a theorem on quoting they send that etherium

Somewhere and put it somewhere else do those do that and it all it all kind of just jumbles together and I don't know what I don't know what this guy is doing over here crypto man Ron out crypto Bobby how are you doing real well I'll

Get you on just shot a little bit but I appreciate you coming on too and I mean as far as things to look forward to with Portis in the next like six months what do you guys building actually by the end of the month we're releasing on main net

And partners with Tabuk ease the gas station network so any dat that wants to sponsor the transaction fees the gas fees our gas relay will make it so any new user doesn't have to pay any transaction fees and it could just come

On board without having a painted gas you

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