Category Archives: Bitstamp

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Bitcoin Bulls Wipe Out Losses on Another Strong Weekend

Bitcoin Bulls Wipe Out Losses on Another Strong Weekend

Bitcoin bulls have once again showed stubbornness over the weekend, wiping out almost all of the losses experienced over the past three days when Bitcoin suffered a flash crash from USD 8,300 to USD 6,300.

Although half of the over 20% price drop had recovered in 24 hours, Bitcoin has shown some signs of fatigue on Friday and Saturday, finding key support around USD 7,300. But the bulls were not to be denied, trumping traditional market timings and proving that Bitcoin buyers were as active as ever on Sunday throughout Asian and European trading hours.

The reaccumulation theory of Bitcoin certainly seems legitimate at this moment, with barely three days of prices below USD 8,000 before the bulls came back in force. Bitstamp’s ongoing investigation into the flash crash that happened on its own platform, in tandem with the USD 250 million sell order on BitMEX, seems to have brought some confidence back into the market for those on the sidelines as well.

After testing USD 8,000 several times, trading volumes broke new daily heights to pierce through the psychological barrier several times, although there is some difficulty in maintaining levels above that. Currently, Bitcoin is poised on a fine line, trading at USD 7,950 (Coindesk, 1:50pm UTC).

It now remains to be seen if North American markets will bring in more strength or cause further pullbacks before Asia wakes up again for Monday trading session.

 

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Bitstamp Investigates $250M BitMEX Liquidation

bitstamp, bitmex, investigation

After the shock slippage of Bitcoin price on Friday, as well as the observations posted on social media regarding large sell orders on Bitstamp, one of the world’s oldest Bitcoin exchange has launched an internal investigation on the large Bitcoin sell order.

As CoinTelegraph reported, the company announced the investigation on its Twitter account, seemingly to unearth the reasons behind the large sell order that significantly impacted its order book, causing a flash crash from around USD 7,800 to USD 6,250 in under half an hour — a loss of about 20%. Forklog also confirmed that about 5,000 bitcoins had been involved in the sell order, each sold at USD 6,200.

2/2: We closely examine every event that causes large-scale movement in our order book and have started an immediate case investigation.

— Bitstamp (@Bitstamp) May 17, 2019

The order is thought to have also triggered a sell-off of roughly USD 250 million on BitMEX, which was almost immediately liquidated during that 30 minutes, causing more immediate panic and triggering further selloffs. However, prices than stabilized at around USD 7,300 where it continues to trade today. Bitstamp insists that its platform had not malfunctioned and was operating as it should be at the time.

Some commentators within the crypto space suggested to Bitstamp an alternative scenario, believing that this could have been a mistake, as the selling price could have been USD 8,200 (which was the price at the time) instead of USD 6,200.

This means some idiot placed a sell order wayyyy below market price – they could have sold for at least 2 k more per coin meaning 10 million in lost equity for no reason. I’m guessing they meant to enter “8200” but entered “6200”

— jgmeyer247 on twitch (@DankSmoke4) May 17, 2019

 

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Coinbase 48x More Expensive to Use Than Stock Exchange

Coinbase 48x More Expensive to Trade than Traditional Stock Exchange

Self-proclaimed market analyst Alex Krüger has drawn the attention of the crypto community to a rather bizarre comparison between cryptocurrency exchanges and traditional stock markets, claiming “maker fee + taker fee” for crypto exchanges could be far more expensive at higher volume tier trading.

1/ Are crypto exchanges overcharging customers?

The average “Maker Fee + Taker Fee” in crypto SPOT exchanges (excluding Gemini) for the lowest volume tier (where most users fall into) stands at 0.33%. pic.twitter.com/tZOmGSsAzO

— Alex Krüger (@krugermacro) March 28, 2019

Krüger queried the fees levied on crypto traders as he explains in a series of Tweets how legacy financial institutions often have a flat rate cut per trade, while a typical fee cut by cryptocurrency exchanges only remains fair for lowest volume tier, and according to him, this is where most users fall into. He illustrated how brokers like Fidelity charge a flat rate of USD 4.95 flat per trade, putting the sum maker and taker fee at 0.02% for a USD 50,000 trade, and at 0.33% for a USD 2,900 trade, which can further be reduced should a trader consider brokers who charge per share rather than per trade.

According to the data he shared, Gemini exchange stands out with a sum maker and taker fee set at an exorbitant 2.00%, followed by Bittrex and Bitstamp with 0.5%, whereas Bitmex being a derivative market only charges 0.05%. Meanwhile, major US cryptocurrency exchange Coinbase Pro takes 0.40%.

In a comparison with foreign exchange markets, Krüger further cited how “an FX trader at Oanda would pay 0.008% for a round trip (in and out of a position)”, concluding that:

“Trading on Coinbase is 48x more expensive, while trading on Bitmex is 6x more expensive.”

Moreover, Krüger opined: “A cross-asset trading costs analysis should also account for spreads and relative volatility,” which invariably should impact fees levied, however, “crypto fees are generally high even after adjusting by relative volatility”.

In recent times, institutional investors have been targeted with offshoot market solutions to further attract this class of investors to the burgeoning digital asset industry. However, considering Krüger’s analyses, crypto exchanges second to huge volatility index of cryptocurrency markets may indeed be a huge deterrent for currency traders from the traditional market.

In February, Marketing consultancy Edelman published a report noting an unwavering millennials’ support for cryptocurrency exchanges, further corroborating eToro’s findings of a generational shift in trust suggesting a concrete trust in cryptocurrency market exchanges as well as a fading faith in the traditional stock market exchanges. However, while cryptocurrency trading appears to be more rewarding due to high volatility, the practical aspects of trading come with hidden fees that make it a trying first-experience for newcomers into the industry.

Blockchain technology may appear to solve certain constraints in legacy financial institutions and reduce the cost of transactions between clients, however, cryptocurrency exchanges may end up constituting a clog to the furtherance of the decentralized ecosystem as it reinvents the centralized systems obtainable in the traditional markets.

 

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Bitstamp Acquired by NXMH in Cash Deal

Bitstamp announced on 29 October 2018 that it has been acquired for an undisclosed amount by NXMH, an investment firm from Belgium, in an all-cash deal.

It is known that the exchange raised funds in December 2016 at a USD 60 million valuation but after the big crypto rally of 2017, Bitstamp’s valuation spiked. In April 2017, a South Korean gaming company was in talks to buy the exchange for USD 350 million. As of 29 October 2018, Bitstamp has USD 55 million of daily trading volume.

Bitstamp is one of the earliest Bitcoin exchanges, having been in operation since 2011 when Bitcoin’s price was a mere USD 2 and is one of the top USD Bitcoin exchanges in the world. It is not the first Bitcoin exchange but now is the oldest crypto exchange still running, after the collapse of Mt Gox.

Apparently, many companies had tried to acquire Bitstamp but conditions for a deal were not optimal until now. The CEO of Bitstamp, Nejc Kodric, says, “Bitstamp has been regularly approached by suitors for quite some time. The reason why we finally decided to sell the company is a combination of the quality of the buyer, the quality of the offer and the fact that the industry is at a point where consolidation makes sense. A major factor in agreeing to the sale is that the mission, leadership and vision of the company remains the same. I want to assure you that Bitstamp remains Bitstamp.”

Kodric asserts that customers do not have to worry about changes in operations or about their accounts. Kodric and Pantera Capital remain minority shareholders after the deal, and will have a say in the exchange’s operations.

On a final note, Bitstamp started in a garage with two laptops and EUR 1,000 of cash, and now has likely been sold for hundreds of millions of dollars only seven years later. In the crypto world, this is business as usual, following Bitcoin’s explosive growth from USD 0.01 to its current price around USD 6,400.

 

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Exchange Alliance Unites Gemini, Bittrex, bitFlyer USA, Bitstamp

Cryptocurrency exchanges Gemini, Bittrex, Bitstamp and bitFlyer USA have formed an alliance called the Virtual Commodity Association (VCA) working group. The goal of the VCA working group is to be a self-regulatory organization (SRO) that will work together to regulate their cryptocurrency exchanges with a common set of rules, which will help increase global crypto adoption by increasing security, compliance, accountability, and transparency. The VCA working group will have an independent board of directors and executive director.

Bitstamp has been one of the top USD to Bitcoin exchanges since the early days. Gemini is a well-known exchange that is headquartered in New York City and geared towards institutional investors. Bittrex is a popular crypto exchange that accepts USD. bitFlyer USA is the US branch of Japan’s most popular exchange.

The common denominator between these exchanges is that they are well-known and make significant amounts of money, but they are nowhere near the top crypto exchanges in the world. Huobi, Binance, Bitfinex, and OKEx are the top crypto exchanges in the world and often have daily trading volume of USD 0.5-1 billion. Bitstamp has trading volume of less than USD 100 million per day, Bittrex is at less than USD 50 million per day, and Gemini is around USD 25 million per day.

Even though the VCA working group is being marketed as focusing on regulations, it is likely that they will be focusing on working together to achieve greater success, like an alliance or cartel. Right now the exchanges in the VCA working group are relatively small fish in an ocean filled with whales, and perhaps if they work together they could become a bigger player. A big part of that will be achieving optimal balance regarding regulations, and they can do that much better together than alone.

It appears the VCA working group is open to accepting new members beyond the initial four exchanges that comprise the group right now. Perhaps the group harbors hopes to one day become influential in the industry.

 

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South Korean Exchange CoinRail Suffers Major Hack

Sources over the weekend suggested that South Korea Cryptocurrency platform CoinRail had been hacked, a fact that was confirmed on its website this morning, according to Reuters.

CoinRail’s statement explains that its system suffered a “cyber intrusion” on Sunday causing a loss of 30% of its traded coins. Sources speculate that the amount stolen might be in the region of KRW 40 billion (Korean won worth roughly USD 37 million) but this has not been confirmed by the company. The exchange is ranked 90th in the world with a USD 2.6 million daily trading volume.

News sources have pointed to the hacking as being the reason for Bitcoin’s overnight drop in value over the weekend, but some pundits are pointing towards the news of Friday’s announcement by the US Commodity Futures Trading Commission that they were investigating three major cryptocurrency exchanges: Coinbase, Kraken, and Bitstamp, along with others.

The breach included NPXS tokens from the Pundi X project, who commented on their site yesterday:

“This morning on June 10 we received notification from Coinrail: There was an unauthorized suspicious trading activity involving 2,619,542,080 NPXS tokens transferred to IDEX”.

“The CoinRail team is now working with the Korean law enforcement to investigate the account holder involved in the unauthorized transactions. Once we get an update from CoinRail, we will update our token holders immediately about the development of this incident. We hope the incident will resolve soon,” it added

Data from Etherscan.io shows the address tried to sell some 26 million NPXS tokens at IDEX, a decentralized Ethereum asset exchange, right after it received 2.6 billion NPXS from another address that is also now labeled as a suspicious account – ‘Fake_Phishing1431’.

Other tokens stolen in the alleged breach were ATC from Aston and NPER project’s NPER token, although there are unconfirmed reports that several other tokens, including Ether, may have been compromised.

There have been numerous warnings from government agencies and regulators about the risks of cryptocurrency trading, not simply in South Korea, but in many countries around the globe; many are in the process of regulating their own financial banking strategies regarding blockchain and cryptocurrency.

Kim Jin-Hwa, a representative at Korea Blockchain Industry Association commented, “CoinRail is not a member of the group that promotes self-regulation to enhance security. It is a minor player in the market and I can see how such small exchanges with lower standards on security level can be exposed to more risks.”

 

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US Regulators Subpoena Coinbase, Kraken and Bitstamp in Bitcoin Probe

The US Commodity Future Trading Commission (CFTC) has subpoenaed Coinbase, Kraken, Bitstamp, and ItBit in an ongoing Bitcoin manipulation probe started last month, reports Coingape.

It is thought that the investigation has been initiated due to the distorted prices in the futures market.

Coinbase is one of the world’s major cryptocurrency exchanges with Kraken in 24th position and a 24-hour trading volume of over 54 million. Bitstamp ranks 38th with 28 million daily trading volume, and ItBit is 62nd with a $9.6 million daily trading volume.

The investigation followed the launch of bitcoin futures on CME Group Inc.’s CME, -0.45%  exchange six months ago. CME’s bitcoin futures derive their final value from prices at these exchanges.  Any kind of manipulative trading in those markets is reported to be able to influence the price of bitcoin futures that the government directly regulates.

The exchanges have been requested to submit their trading data to the CFTC in an attempt to prevent distorted prices in the CME futures market. The Wall Street Journal has said that the problem with CME has existed since it launched Bitcoin futures, requesting data from the exchanges in order to base the bitcoin price for futures trading. CFTC officials had previously backed the launch of bitcoin futures, viewing the move as risky, but worthwhile.

Apparently, CME didn’t have the agreements that allowed trading data sharing, and they had to rely on third-party firms to calculate the index, according to Market Watch. On the regulators search into fake orders and spoofing, Jesse Powell, the Chief Executive of Kraken recently commented:

“If there is any kind of attempted manipulation, whoever is doing it is taking a huge amount of risk for very little possible upside.”

The company behind ItBit exchange, Paxos’ Chief Executive Charles Cascarilla stated that “We have definitely entered an unknown area where it is clear there is a desire for tightened oversight.”

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$15 Billion Shed in Two Hours in Bitcoin, Crypto Markets Overnight Flash Crash

Over Saturday night on 10 June, Bitcoin and crypto markets dipped significantly, with Bitcoin shedding USD 300 in just over an hour, writes Inside Bitcoins.

The sideways market which has endured for some weeks finally came to an end when the mini-crash wiped out USD 15 billion off cryptocurrencies in a couple of hours.

The current scenario is that if Bitcoin slides, other cryptocurrencies tend to follow and this downward charge was again led by the major digital currency which has lost over 4.5% since its sudden drop in value in less than 24 hours. At the time of writing, other markets are falling with EOS, IOTA, Ontology, OmiseGo and Icon having had a particularly restless few hours.

The markets slid over 6% over the past day, creating a rush selloff. Currently, at a total capitalization of USD 324 billion, markets have fallen fast from yesterday’s level of USD 345 billion. At the time of press, Bitcoin is selling at USD 7,324 as indicated my CoinMarketCap.

Ethereum went with BTC and slid 5%, losing USD 25 in two hours, dropping to a new weekly low of USD 576 at time of writing. Previous to that, the currency had been hovering between USD 580 and USD 620 for over a week.

There is speculation that there may be two significant factors precipitating such rapid downward movement in crypto markets. Some pundits are pointing towards the news of yesterday’s announcement by the US Commodity Futures Trading Commission that they are investigating three major cryptocurrency exchanges: Coinbase, Kraken, and Bitstamp, along with others.

Others point to emerging news that South Korean crypto exchange CoinRail has been hacked, although the exchange is just ranked 90th in the world with a USD 2.6 million daily trading volume.

The biggest fall in the market’s top 10 has been IOTA, losing almost 12% on the day with USD 600 million wiped off its market cap, falling from USD 4.8 billion to USD 4.2 billion in a few hours.

Despite this slump, many analysts see this drop as insignificant. The 24-hour trading volume in January saw Bitcoin experience a trading volume of USD 17 billion in a day. Yesterday’s Bitcoin trading volume was a mere USD 4 billion, reports AMB crypto.

With market prices still in the follow-Bitcoin trend, a fundamental turnaround in market fortunes is reliant on Bitcoin’s performance over the following weeks.

 

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Bitcoin Price Analysis, 21 March 2018: Resistance at $9,000 as Prices Rise

Bitcoin prices are retreating from the high of USD 9,000 reached today across BTC/USD markets. The slightly bullish market sentiment that started from Bitcoin and continued to rule crypto markets throughout the day was halted with an instance of mass selling.

The Day’s Signals

  1. Traders appear to be fearful of yet another breach with prices experiencing a large drop only a few hours after USD 9,000 prices were reached.
  2. A large selloff triggered a break below USD 8800 levels.
  3. Markets still appear to be uneasy with the price’s rise.

Bitcoin USD bitstamp btcusd Mar 21 2018

The price rise that led BTC/USD markets to a high appeared to be heading closer to $9200 price levels.  However, a selloff triggered a panic reaction among markets. The activity of traders goes to show that the market sentiment is still fragile after weeks of decline. Bitstamp BTC/USD charts showcase the fear traders bear for yet another breach of Bitcoin’s price. It’s worth pointing out that not too long ago, prices had fallen to price levels below USD 7,500 on March 18.

Bitcoin USD okcoin-btcusd-weekly futures Mar. 21 2018 22

OKCoin BTC/USD weekly futures charts are quite indicative of the uncertainty that’s plaguing traders amid the current market sentiment. Futures prices appear to be following the live price in close proximity in the more recent hours. And yet, the bottom price futures reached deviated from live prices by a decently positive margin. Futures traders are uncertain as to how Bitcoin would be priced and hence, no clear path can be predicted.

One thing to take out of the events in today’s trading session would be that traders are prone to panic as Bitcoin’s price recovers. Today’s price movements, however, don’t seem to be deterring futures traders and if so, it shouldn’t be priced in through panicky moves from those believing in the positivity tide of today’s session. Bitcoin’s recovery could have some ways to go for as long as selling pressure remains in the overall market.

Trading volumes across BTC/USD markets today reached levels close to the ones when the bitcoin price went below USD 7,500 recently. Notably, the market’s ability to recover from a wave of selling pressure is something noteworthy. Under such indicative support against sell0ffs, the market could be sensing a new feeling of hope for a potential upcoming recovery.

 

 

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