Bitstamp is a well-established Bitcoin exchange, operating since 2012. It is one of the top five USD volume bitcoin exchanges and has some degree of influence among traders, playing second fiddle to Bitfinex.
For a while now, it has been known that the Chinese exchanges, particularly OKCoin, are involved in faking trading volume. Bobby Lee of BTCC has spoken openly about this. The ex-CTO of OKCoin admitted as much in a statement made after leaving the company. The famous "volumizer" running on their futures platform is known to amuse traders in slow times of market activity, as seen below:
For a while now, it has been known that the Chinese exchanges, particularly OKCoin, are involved in faking trading volume. Bobby Lee of BTCC has spoken openly about this. The ex-CTO of OKCoin admitted as much in a statement made after leaving the company. The famous "volumizer" running on their futures platform is known to amuse traders in slow times of market activity, as seen below:
But we knew that the Chinese fake their volume, with their 0% fee model being the main culprit. This fee structure allows for wash trading between customers, with or without the knowledge of the exchange. However, we would not expect Western exchanges to behave in the same manner. But many traders are pointing to the charts and say there is something going on over there, see Exhibit A:
The orange line is Bitfinex, which is how a normal exchange would behave when there's no overal market turmoil The yellow line is Bitstamp. Notice how within the one hour period in the chart, there is a large degree of swinging between the spread, $2.5, for no particular reason. On a normal situation you have people that put their bid or offer in between the spread, but there appears to be just constant orders hitting both sides, causing these choppy swings.
In the chart below, note how during periods of low volatility, multi-thousands of coins are exchanged, exceeding the volume during a significant price change.
In the chart below, note how during periods of low volatility, multi-thousands of coins are exchanged, exceeding the volume during a significant price change.
This may be coincidence, it may be nothing. But traders who sit at charts all day notice irregularities like this, and it is following a similar pattern as has been observed in China, which essentially has confirmed fake volume. This could easily be going on without Bitstamp's knowledge, between marketmakers that they have no control over.
Bitstamp had offered 0% fees after they were hacked earlier in the year, which would make some sense. Their marketmakers could have a special deal where they receive a rebate for volume delivered. This is all speculation among traders, and nobody knows for certain. But there's enough strange action going on with their price action and volume changes that it has been arousing suspicion.
Bitstamp had offered 0% fees after they were hacked earlier in the year, which would make some sense. Their marketmakers could have a special deal where they receive a rebate for volume delivered. This is all speculation among traders, and nobody knows for certain. But there's enough strange action going on with their price action and volume changes that it has been arousing suspicion.
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