Bobby Lee may be wrong (BTC curiosity series)
This is the first posts from series about curiosities in the bitcoin world.
Bobby Lee (CEO of BTCC) is well respected person in bitcoin world. BTCC (formerly BTC China) is the oldest bitcoin exchange in China. This is probably reason why is Bobby so explosive when comes to discussion about his competitors Okcoin and Huobi. Those exchanges are outperforming BTCC in trading volume significantly. His response ?
(source www.forum.bitcoin.com) link
Ok Bobby Lee. I think you are wrong
The first thing why he is wrong is description of wash trade . A wash trade is a form of market manipulation in which an investor simultaneously sells and buys the same financial instruments. (source Wikipedia)
Hypothesis
My first hypothesis (100% proven by my own trading but you don't have to believe me) is that both exchanges are doing same thing but not a wash trading. They are “ printing “ these trades on the “ tape ” (trade record on the right side ) . The thing is these orders never been executed on the primary market ( in the middle of left side, where buyers are matching with sellers). Is there any secondary market ? (subject of my second hypothesis but I am not going to tell :)
Those prints probably never been executed even outside of the market. So what's the problem? If there is no trade then can not be also wash trade , right ? It is only wash and with full respect to Bobby Lee. This is not enough :)
The second thing why is Bobby Lee wrong is even more curious.
Bobby said : “ They use it for bragging purposes ”
Well, I think this is not the case at all. The printing is mostly used to confuse participants on the market. That's right. But not those participants who wants to buy one bitcoin after job because it's sexy. It's exactly opposite. They are doing it to protect this guy. They want to keep him sexy for long time. :) The experts on both exchanges have to do something to protect the market against predatory algorithms . I am on the market some time and I saw plenty of market manipulations as front running, spoofing , flash orders and wash trades. Those techniques are not even rare. Can you imagine how those techniques could be effective on the markets where 99% of participants are retailers ? Oh Lord, keep me on the Bright Side :D
Crypto-currency world has built on faith and it's enormously unstable. Chinese market is biggest crypto-playground on the world but frankly , in scale of US derivative or stock trading is tremendously small. If some guy with tons of money decides to kill the market. He can do it at the morning. At the lunch time is over and our assets could be gone by day. That's the reality and real reason why the providers are faking tapes. What a smart idea.