Spreads UPDATE
Updated
Still, with no clear explanation, this is the reason why
I WOULD NOT BE HOLDING ANY FUNDS ON EXCHANGES.
GDAX - Finex spreads have widened dramatically:
Not because of tether, but because of the widening spreads at a time where liquidity has NOT dried up. The spreads widened DURING the 6K sideways trading. Volatility was LOW at the time.
Yes, the spreads were exceptionally wide during the parabolic cycle. This can possibly be due to the enormous influx of users on exchanges rapidly buying up bitcoin during the 2017 psychological mania.
HOWEVER
The widening in spreads in the low volatility environment at 6k was EXTREMELY suspicious to me.
As stated by the Willy Report in 2013/14:
"Combined with Willy still being active, this caused the spread between Gox (Mt. Gox) and other exchanges to get completely out of hand. At the pinnacle of it, on January 26th, Willy (Willybot, a bot insider that manipulated the price of bitcoin and had the capacity to buy bitcoin for $0) suddenly became inactive – and with it, the price retraced back to a more reasonable spread with the other exchanges."
"In total, a staggering ~$112 million was spent to buy close to 270,000 BTC – the bulk of which was bought in November. So if you were wondering how Bitcoin suddenly appreciated in value by a factor of 10 within the span of one month, well, this may be why."
"So how did all of this trading activity affect the price of Bitcoin as a whole? The answer is, unfortunately, enormously."
"The huge volume spike on July 28 15:14 is where the big buying starts. 15,000 coins get bought in the span of 30 minutes. According to the trade data, buying continues until the 31st, 15:55. After a four day pause, there’s some small buying on August 5th, but it really picks up again on the 12th at 21:32. Buying continues on-and-off, with some large spikes especially on the 19th, 27th and the 30th, where ten of thousands of coins are bought. Basically, all the huge green volume spikes in the above chart are the handiwork of Markus, and Markus alone." (Markus is a secondary bot noticed alongside WillyBot)
So, what's up with the GDAX spread?
The spread in my chart (BTCUSD[GDAX] - BTCUSD[finex]) is in fact trading at the lowest point EVER. (At least that's what I see compared to the drawn out daily chart which, by Tradingviews logic will use the daily close to calculate the spread.
Using, bookmap.com 's chart's I maintain that sell volume is exceptionally aggressive and that, evident in this video, youtube.com/watch?v=ONB7yGO2A1o there appears to be one or more aggressive bots placing significant downside pressure on GDAX books. In the video we can see, in the initial frame, the large red squares in the depth chart. These are the positions in question. They seem to have an endless supply of bitcoin, which I have observed since June. The bot's continue to place between 60-85 bitcoin diversified within the 10-20 points NTM (near the money) on the ASK side and appears to be 24/7.
Although hard to see in the realtime GDAX book, the aggregation of the ASK in the Bookmap charts, combined with the visualised depth chart makes these positions very clear.
This is my only explanation for the spreads, and nowhere else have I seen anyone have any better explanation (or any at all).
Although my data is not granular, one thing that can be clearly shown is the extremely suspicious spreads and more importantly, the timeliness of these spreads widening before price action.
In the above chart we can see that exchange spreads (GDAX-FINEX) widened significantly in a very controlled and stable manner until finally falling off AT THE SAME TIME as the enormous "pump candle" of the 15th of October. The spread seemed to tighten once again, as if the market began to re-balance, albeit slowly.
Then once again, the spread began to widen again, directly into the first sell of November.
Even more interestingly, during the pump of the 15th of Oct, at one point, GDAX traded OVER $1007 CHEAPER than Finex.
My fear is that this is only a 1 minute chart, and the Tradingiew spreads are using the candle close as data points. It is possible that, during that one minute candle, the spread was indeed far greater than this 1007 point value.
Although my data is not granular, the Willy Report of Mt. Gox in 2013 illustrates and proves that inter-exchange spreads CAN be influenced and OR caused by malicious bot behaviour. I do not suggest in any way that GDAX is a malicious exchange or that GDAX is acting against their TOS. Further I don't suggest that any other exchange is engaging in suggested or implied behaviour. It's entirely possible that this trading is simply being conducted by a client, retail or third party trader on these exchanges. Additionally, I could be entirely wrong and that the inter-exchange spreads are caused by an entirely different issue. I suggest that you read The Willy Report here: willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/ and draw your own conclusions.
I WOULD NOT BE HOLDING ANY FUNDS ON EXCHANGES.
GDAX - Finex spreads have widened dramatically:
Not because of tether, but because of the widening spreads at a time where liquidity has NOT dried up. The spreads widened DURING the 6K sideways trading. Volatility was LOW at the time.
Yes, the spreads were exceptionally wide during the parabolic cycle. This can possibly be due to the enormous influx of users on exchanges rapidly buying up bitcoin during the 2017 psychological mania.
HOWEVER
The widening in spreads in the low volatility environment at 6k was EXTREMELY suspicious to me.
As stated by the Willy Report in 2013/14:
"Combined with Willy still being active, this caused the spread between Gox (Mt. Gox) and other exchanges to get completely out of hand. At the pinnacle of it, on January 26th, Willy (Willybot, a bot insider that manipulated the price of bitcoin and had the capacity to buy bitcoin for $0) suddenly became inactive – and with it, the price retraced back to a more reasonable spread with the other exchanges."
"In total, a staggering ~$112 million was spent to buy close to 270,000 BTC – the bulk of which was bought in November. So if you were wondering how Bitcoin suddenly appreciated in value by a factor of 10 within the span of one month, well, this may be why."
"So how did all of this trading activity affect the price of Bitcoin as a whole? The answer is, unfortunately, enormously."
"The huge volume spike on July 28 15:14 is where the big buying starts. 15,000 coins get bought in the span of 30 minutes. According to the trade data, buying continues until the 31st, 15:55. After a four day pause, there’s some small buying on August 5th, but it really picks up again on the 12th at 21:32. Buying continues on-and-off, with some large spikes especially on the 19th, 27th and the 30th, where ten of thousands of coins are bought. Basically, all the huge green volume spikes in the above chart are the handiwork of Markus, and Markus alone." (Markus is a secondary bot noticed alongside WillyBot)
So, what's up with the GDAX spread?
The spread in my chart (BTCUSD[GDAX] - BTCUSD[finex]) is in fact trading at the lowest point EVER. (At least that's what I see compared to the drawn out daily chart which, by Tradingviews logic will use the daily close to calculate the spread.
Using, bookmap.com 's chart's I maintain that sell volume is exceptionally aggressive and that, evident in this video, youtube.com/watch?v=ONB7yGO2A1o there appears to be one or more aggressive bots placing significant downside pressure on GDAX books. In the video we can see, in the initial frame, the large red squares in the depth chart. These are the positions in question. They seem to have an endless supply of bitcoin, which I have observed since June. The bot's continue to place between 60-85 bitcoin diversified within the 10-20 points NTM (near the money) on the ASK side and appears to be 24/7.
Although hard to see in the realtime GDAX book, the aggregation of the ASK in the Bookmap charts, combined with the visualised depth chart makes these positions very clear.
This is my only explanation for the spreads, and nowhere else have I seen anyone have any better explanation (or any at all).
Although my data is not granular, one thing that can be clearly shown is the extremely suspicious spreads and more importantly, the timeliness of these spreads widening before price action.
In the above chart we can see that exchange spreads (GDAX-FINEX) widened significantly in a very controlled and stable manner until finally falling off AT THE SAME TIME as the enormous "pump candle" of the 15th of October. The spread seemed to tighten once again, as if the market began to re-balance, albeit slowly.
Then once again, the spread began to widen again, directly into the first sell of November.
Even more interestingly, during the pump of the 15th of Oct, at one point, GDAX traded OVER $1007 CHEAPER than Finex.
My fear is that this is only a 1 minute chart, and the Tradingiew spreads are using the candle close as data points. It is possible that, during that one minute candle, the spread was indeed far greater than this 1007 point value.
Although my data is not granular, the Willy Report of Mt. Gox in 2013 illustrates and proves that inter-exchange spreads CAN be influenced and OR caused by malicious bot behaviour. I do not suggest in any way that GDAX is a malicious exchange or that GDAX is acting against their TOS. Further I don't suggest that any other exchange is engaging in suggested or implied behaviour. It's entirely possible that this trading is simply being conducted by a client, retail or third party trader on these exchanges. Additionally, I could be entirely wrong and that the inter-exchange spreads are caused by an entirely different issue. I suggest that you read The Willy Report here: willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/ and draw your own conclusions.
Note
Tether and the GDAX-Finex spread. Natually, a bitcoin traded against tether at Bitfinex (given tether = 0.89) would = BTC[finex] = BTC[GDAX]*1.11
However, this would only apply if the BTC/USD pair on Bitfinex was ACTUALLY BTC/USDT. Bitfinex is very quiet and doesn't tell us that the BTC/USD REAL USD.
"Verified users on Bitfinex can deposit, trade and withdraw both fiat and Tether-denominated USD, whilst a USDT/USD trading pair exists to allow for direct conversions between the two."
However if the case is that the spread between exchanges is due to this theory, we can calculate the implied proportion of USD:USDT that comprises the USD liqidity at bitfinex. For example. If the spread between GDAX(real USD trading), and BTC/USD at finex was 10%, and USDT was currently trading at 0.9, we can then deduce that 100% of the BTCUSD pair is actually against tether.
As of current, the spread is -65.7points and tether is trading at 0.98800.
Thus the spread given 3420.9[finex] = 1.920%
Thus 0.01920+0.98800= ~1 (or 1.0072)
The market implies that roughly 100 percent of USD liquidity at bitfinex is Tether.
This update possibly negates my above comments
Note
If this is true, where does all the fiat deposited to bitfinex go? and what causes the poor pricing in USDT/USD
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