enrique11 Posted June 10, 2018 Share Posted June 10, 2018 (edited) As if this space didn't have enough problems already: https://www.marketwatch.com/story/us-regulators-demand-trading-data-from-bitcoin-exchanges-in-manipulation-probe-2018-06-08 Quote CME’s bitcoin futures derive their final value from prices at four bitcoin exchanges: Bitstamp, Coinbase, itBit and Kraken. Manipulative trading in those markets could skew the price of bitcoin futures that the government directly regulates. CME, which launched bitcoin futures in December, asked the four exchanges to share reams of trading data after its first contract settled in January I remember when the first BTC futures contract expired, how BTC's price just happen to take a dive a day or two before that. Fishy stuff? - maybe. The BTC contracts are settled in cash, so one possible way to game the system I suppose is to buy BTC prior to expiration gradually, increase the price, then sell it as price is doing good, and then dump most of it shortly prior to expiration, then when contract(s) expire you cash them out, so you "win twice", or if too much capital is required to move the price of BTC by buying it, you just make it look like the price went down (on exchanges if that's even possible) so you can at least cash out on the BTC futures contract(s) without having to buy BTC in the first place. There are different possible ways to game the system, but I don't know how they would do it...BTC has high marketcap and I don't know if one exchange, even a big one, has power to manipulate the price to that extent, and even if they were able to, the manipulation might be obvious. Edited June 10, 2018 by enrique11 Link to comment Share on other sites More sharing options...
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