Something isn’t right in the cryptocurrency industry. Have you been able to feel it or see it? While all financial markets are manipulated, it is just the way of the world. Recently it has been much clearer to everyone that so is the crypto markets as well. Sure we all knew that there are whales that try to pump and dump the market for their own gains. This has always been the case. But what is becoming clearer and clearer, especially recently, is that it seems the exchanges are manipulating the markets as well. Specifically the Coinbase and Bitmex exchanges.
One such example was on March 12, everyone all remembers when the price of bitcoin crashed hard and reached a low of around $3,800. But perhaps something you don’t know was that when it reached $3,800, it was crashing so fast that “allegedly” Bitmex pulled the plug on their system. An exchange the size of Bitmex’s size has extreme power and influence on the market. Along with Bitmex pulling the plug, allegedly a few other exchanges did as well, the price of bitcoin stopped decreasing, once the exchanging turned back on the price immediately went back up. Many experts claimed that if Bitmex had not gone offline, the price of bitcoin could have very easily gone down to the $1,000 dollar range. Can you imagine the chance to buy a full bitcoin at $1,000? Was this a manipulated move, or even a communicated move between exchanges?
I think everyone can agree that while not ideal, it is expected that once in a while an exchange will have a problem and go offline. But we are talking about once a year perhaps. Recently Coinbase has been going offline whenever there has been a quick price swing of $500 or more. This action contributes to halting the price increase during the extreme pumps, and it also halts the decreases during the dumps of equal scale. Here is a picture detailing each recent Coinbase shut down, and it is very suspicious to say the least.
The frustrating thing is that during the last bull run in 2017/18 we saw a lot of exchanges that couldn’t handle the surge in demand we were seeing at the time. It was understandable, it was an unprecedented amount of interest we were seeing, and the foundation just wasn’t ready yet. The exchanges were better than let’s 8 years before, but in the scheme of things, the market was still in an infant status.
Anyways, after these mishaps, exchanges apologized and pledged to invest a large amount of funds to build up their infrastructures that would help to prevent this in the future. This is a picture of an email that Coinbase sent out in December 2017? Does it look familiar?
They have had 3 years since then to improve the infrastructure, and to try to prevent this.
But maybe we are asking the wrong questions. Maybe the improved infrastructure is already there, maybe it has no problem handling the surge in demand during the frenzy buy and sell off moments. Maybe they are planned disruptions in service. Why would an exchange want to keep the price in the same range? One odd thing for certain is that Coinbase hasn’t even comment on these speculations.
I know many people originally got into crypto because they were tired of corrupt governments, controlled money, wanting to make an investment and the list goes on. But if exchanges are controlling the price, is it just more of the same?
We have all seen the extremely bullish future price predictions for bitcoin, but will we ever be able to reach anywhere near those milestones if anytime there is any significant movement in price, the exchanges shut off?
I think this is a very important issue that we need to solve in the crypto market before we can truly advance to the stage that we all want to.
What do you think of these market shutdowns? I know it has made me think very carefully about which exchanges I will use, and has made me want to stay even farther away from Coinbase. I believe the best solution would be for the rise in use of decentralized exchanges.