Bitcoin in the News : 2019-11 More++

In my previous post, Bitcoin in the News : 2019-11 Price, I looked at one burst of bitcoin activity, noted the explanations offered by analysts, and wondered,

Rumors and market manipulation -- why would anyone entrust significant sums to this market?

For this current followup post, when I started to gather news stories from the same month, the first story that popped up multiple times was on the same theme. The first two occurrences were:-

• 2019-11-04: Did Bitcoin Price Manipulation Fuel 2017 Surge? Study Says Yes (bloomberg.com) • 'Academics update paper that alleges manipulation using Tether'
• 2019-11-04: Study: Single anonymous market manipulator pushed bitcoin to $20,000 (cnbc.com) • 'A forensic study on bitcoin’s 2017 boom has found that nearly the entire rise of the digital currency at the time is attributable to “one large player,” although the market manipulator remains unidentified.'

It happens that I had already mentioned that story -- from the same source -- last year in Bitcoin in the News : 2018-06 More++:-

2018-06-13: Much of bitcoin's 2017 boom was market manipulation, research says (cnbc.com) • 'By tracking Bitfinex transactions, which are recorded on a public ledger, [University of Texas finance professor John Griffin] found that another cryptocurrency, tether. was used to buy bitcoin after large price falls.'

What's the difference between the two incarnations of the research? The first identified possible market manipulation; the second attributed it to a single entity. As I understand it, that entity created money by issuing unbacked tether, then used that funny money to buy bitcoin, thereby fueling its dramatic rise in 2017. If so, the possibilities to do the same by other entities are limitless. No printing press required.

As for the burst of bitcoin activity in the '2019-11 Price' post, I also found multiple stories. The first was:-

• 2019-11-22: Stark China Warning Causes Bitcoin To Suddenly Crash 10% As Other Major Cryptos Nosedive (forbes.com) • 'The Shanghai-based central bank also warned against conflating the country's interest in blockchain with bitcoin and crypto. [...] The bitcoin and cryptocurrency industry has been rocked by reports of Chinese police raids on the offices of major bitcoin and crypto exchanges Binance and Bithumb in the country over the last week -- though both have denied the raids took place.'

And if those two stories weren't bad enough, consider this story that appeared multiple times in another of my Google News interests, botnets:-

• 2019-11-27: Stantinko botnet mines Monero using YouTube (finance.yahoo.com)

Money talks and the bad guys are everywhere. I'm holding my nose as I post this.

Bitcoin in the News : 2019-11 Price

In contrast to the first half of 2019, where five out of six monthly bitcoin price charts showed a rising trend, the November chart was the fourth out of five in the second half of the year to show a falling trend. The only exception was last month's Bitcoin in the News : 2019-10 Price.

My usual technique to understand a chart is to identify periods of high volume and find relevant discussions in the bitcoin / cryptocurrency press. What does the November chart say?

Bitcoin (BTC) Price Index

In November there were more than a half-dozen periods showing jumps in volume. The most significant cluster was:-

2019-11-22 0800 (Drop)

Although there was no corresponding discussion in Cointelegraph's Analysis category, the site's Price Analysis tag had a couple of relevant articles.

2019-11-22: Price Analysis 22/11: BTC, ETH, XRP, BCH, LTC, EOS, BNB, BSV, XLM, TRX • 'Fear gripped the markets on the news that Chinese authorities had raided the offices of the leading cryptocurrency exchange Binance. This negated all the positive effects that had accrued following President Xi Jinping’s endorsement of blockchain technology. Though Binance denied reports of any raids, price action within the sector has remained subdued.'

So the drop was sparked by a rumor? For more about 'President Xi Jinping’s endorsement', see the '2019-10 Price' post.

2019-11-25: Price Analysis 25/11: BTC, ETH, XRP, [...] • 'We believe that the current dip is showing signs of a bear trap.'

So the drop was another skirmish in the ongoing battle between bulls and bears? Plant a rumor and act on the confusion provoked by that rumor. That sounds like market manipulation. Rumors and market manipulation -- why would anyone entrust significant sums to this market?

Although Binance has been mentioned occasionally on this blog, what is it exactly? Wikipedia's Binance page says,

Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies. Since early 2018, Binance is considered as the biggest cryptocurrency exchange in the world in terms of trading volume. [...] The company was founded in China but moved its servers and headquarters out of China and into Japan in advance of the Chinese government ban on cryptocurrency trading in September 2017. [...] As of January 2018 it was largest cryptocurrency exchange with a Binance coin (BNB) market capitalization of $1.3 billion. [...] On May 7, 2019, Binance revealed that it had been the victim of a “large scale security breach” in which hackers had stolen 7,000 Bitcoin worth around U.S.$40 million at the time.

The relationship between Binance and 'Binance coin (BNB)' isn't clear to me. BNB is one of the coins listed in the Cointelegraph articles I've quoted above, so it must be significant. I'll look at that another time.