Nasdaq Says It Can Stop Cryptocurrency Market Manipulation

Nasdaq says it can lead the fight against market manipulation and fraud that has been plaguing the cryptocurrency market. In fact, a few exchange platforms are already adopting the exchange operator’s market surveillance technology.


Helping to Combat Cryptocurrency Fraud

According to Bloomberg, the U.S. stock exchange behemoth believes it can solve some of crypto’s issues – fraud and market manipulation. In a report published on November 1st, Nasdaq noted that it had a wealth of experience in dealing with the intricacies of the assets trading market.

A section of the Nasdaq report reads:

Regulators, brokers, and exchanges have surveillance teams that monitor activity constantly and advanced technologies to help capture and analyze abusive behaviors including pump-and-dump schemes, insider trading, wash trading as well as spoofing and layering.

Many virtual currency critics are quick to point to the lack of robust regulations in the industry as an incentive for all sorts of illegal trading practices. In the U.S., the Justice Department in conjunction with the CFTC began investigating allegations of price manipulation in the Bitcoin 00 trading arena.

The Chairman Of The CFTC Might Just Have Brought The Bitcoin Crash To An End

Exchanges Already Using It

According to Nasdaq, some significant players in the cryptocurrency trading space are already using its market surveillance technology.

In mid-2018, Bitcoinist reported that Gemini, SBI Virtual Currencies, and three other platforms were already using Nasdaq’s SMARTS technology. With more developments in the cryptocurrency trading space, the company appears to be in high demand.

Speaking to Bloomberg, the head of exchange and regulatory surveillance at the exchange operator, Tony Sio, said:

We’re now getting approached every week or two. We won’t work with all of these firms though since a lot of them are quite early stage or not reputable yet.

Nasdaq is Embracing Crypto

For Nasdaq, since the start of 2018, it has been a case of moving from tentative to more concrete involvement in the emerging virtual currency industry. CEO, Adena Friedman, has on many occasions expressed bullish sentiments about the prospects of cryptocurrencies while reiterating the need for more robust regulations.

Reports indicate that the company wants to open a cryptocurrency exchange platform. However, such plans rest on the emergence of a proper regulatory framework for the industry.

Can Nasdaq’s market surveillance tech prevent fraud and manipulation? Let us know below!


Images courtesy of Shutterstock

Chainalysis Finds That Bitcoin Whales Are Not the Sole Source of Market Volatility

Data from a detailed Chainalysis study found that Bitcoin whales may actually function as a stabilizing force in the market.


Who’s in Charge of the Market?

A newly published study from Chainalysis makes a strong case that Bitcoin (BTC) 00 whales are not the shadowy culprits behind the notorious volatility associated with Bitcoin and the wider cryptocurrency market. The blockchain research firm reached this conclusion by analyzing 32 of the largest bitcoin wallets, which contain a total of 1 million bitcoin worth nearly $6.3 billion.

To date, the general assumption among many traders has been that bitcoin whales impact price action by exerting their inordinate influence over the entire cryptocurrency market. Surprisingly, Chainalysis’ research goes against this common assumption by revealing that the ranks of bitcoin whales are comprised of “a diverse group,” and less than a third are actually active traders. Data also showed that these ‘trading whales’ displayed a tendency to accumulate on price declines rather than function as the sole force responsible for causing sell-offs.

Close analysis of the “trading” whales suggests that they do not significantly contribute to volatility as:

Net activity demonstrates that trading whales were not selling off Bitcoin in any mass amount, but rather were net receivers of Bitcoin from exchanges in late 2016 and 2017. This indicates that trading whales were, in aggregate, buying on declines and, consequently, were a stabilizing, rather than destabilizing factor in the market…

Recent data from a separate study also shows that bitcoin whales and institutional investors often prefer to buy and sell cryptocurrency using over-the-counter (OTC) transactions instead of dumping large amounts of cryptocurrency on a variety of exchanges.

Whale breaching and diving.

Apparently, there are only 4 Whale Species

By dividing these 32 wallets into four groups, Chainalysis was able to determine that nine of the wallets with more than 332,000 coins were controlled by traders who sprung up around 2017 and this group made regular transactions on exchanges. The second group of 15 wallets comprised mainly of miners and early adopters in charge of 332,000 coins was relatively action-free except for the occasional sales when bitcoin prices skyrocketed from 2016 to 2017.

Chainalysis concluded that the two remaining groups consisted of three wallets belonging to “criminals” in possession of more than 125,000 coins and forever “lost” wallets and with a coin value of more than $1.3 billion (212,000 BTC).  

Facts Help the FUD Dissipate

The Chainalysis report provides a fascinating insight into the detailed movements and holdings of bitcoin whales and in a market that is heavily driven by rumor and speculation, a bit of solid research that shines a correct light on market misconceptions is always a welcome treat.

Now


On the topic of rumors, manipulation, and whales, surely the crypto-verse will wonder exactly which whale just moved
15,220 ($100,317,283) from between wallets.

Do you think Bitcoin whales drive the market — or is the Chainalysis report a better explanation for what moves the market? Share your thoughts in the comments below! 


Images and media courtesy of Shutterstock, Twitter/@WhaleAlert.