5/21 ANDY HOFFMAN (CryptoGoldCentral.com): Beat the Bitcoin BOTs!

For 15 years, I have been one of the world’s leading commentators on rigged financial markets – principally Precious Metals, but stocks, bonds, currencies, and commodities, too. As well, a keen observer of futures markets – particularly the high frequency trading algorithms that dominate them.

In Bitcoin’s case, it’s difficult to tell when the “BOTs” took over – although in hindsight, we know that part of the Mt Gox fraud were “Willy BOTs” programmed to take the price higher. Which in essence, is no different than what the Fed and other Central banks do in the bond markets; and the PPT and other government operatives in the equity and currency markets.

Sometime around Bitcoin’s recent bull run apex in December, which just happened to coincide with the launch of Bitcoin futures markets, the same BOTs I have watched in the Precious Metal paper markets for years appeared on major exchanges like Bitstamp and Bitfinex – with such regularity, and predictability, it’s embarrassingly obvious to even the most inexperienced market observers.

On Bitstamp, the number of downticks dwarfs the upticks nearly all the time – 99% of which, are microtransactions like 0.001 BTC…clearly utilized solely to suppress the price. On Bitfinex, a BOT I call “leading edge” is regularly the top offer, with a constantly changing, obviously fake “size” of ten or more Bitcoin. I’m sure it’s the same on other exchanges, but I only watch these two - care of the excellent real-time feeds on BitcoinWisdom.com.

Some say the BOTs are a function of the “financialization” of Bitcoin by futures markets and the increased number of exchanges offering margin – and shortly, HFT - trading. It’s a crying shame that this cancer has penetrated Bitcoin – but fortunately, the transparency of the Bitcoin blockchain should make it difficult, if not impossible, to replicate the experience of the paper Precious Metal markets.

Others opine we are “still in a bear market” – and thus, it’s not surprising to see relentless selling pressure. I disagree with this notion entirely – not just due to the price appreciation since the Mt Gox Trustee-induced capitulation of February 6th, but Bitcoin’s most bullish-ever fundamentals - with only the Mt Gox Trustee standing in the way, in my view, of a more significant bull run…that likely, will be in the rear-view mirror by year end.

For those worried that BOTs are a threat to Bitcoin, I’d say that while they are indeed a negative factor, there is too much pent up buying pressure for any entity, or entities, to hold it down. With the additionally bullish factor that no malignant entity owns a material amount of Bitcoin; and that the odds of a “Cartel” of parties with a mutual interest in Bitcoin’s destruction, and the means to accomplish it, are ZERO.

To that end, one thing I have noticed about the BOTs, is their Achilles Heel. Which is, plain and simple, significant Bitcoin buying. When it enters the market, the sell BOTs immediately withdraw – as clearly, they can only function in low-volume environments…which, as Bitcoin becomes more popular, will eventually become extinct.

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