Picasso trading bot manipulates BTC price on major exchanges

Bitcoin analyst has published a report describing Picasso trading bot which he suspects in manipulating Bitcoin prices on Coinbase, GDAX, and Bitfinex exchanges
25 December 2017   698

On December 24, Bitcoin analyst under the nickname Bitfinex'ed has published a report in his blog on Medium, in which he described a bot named Picasso, who could be manipulating Bitcoin prices on the exchanges. The analyst was monitoring Coinbase, GDAX and Bitfinex since noticing suspicious activity back in May, and was recording GDAX activity along with Bitfinex for the past several months.

Bitfinex'ed states that Picasso could have evolved from Spoofy, a previously identified trade bot. But Picasso is using a different strategy, called "painting the tape", which is an age old tactic by traders to artificially manipulate prices.

Bitcoin analyst has published a video, showing activity from GDAX and Bitfinex from December 7 of 2017. As it can be seen on the video, Coinbase prices for Bitcoin went several thousands of dollars up compared to the rest of the market, and Bitfinex'ed claims that the volume and price volatility is not from organic demand, but from a trading bot that hit an empty orderbook.

The volume on Bitfinex plummets to practically zero when Coinbase went down, indicating this bot is ‘replaying’ or doing arbitrage for transactions from Coinbase, on Bitfinex. Someone buys Bitcoin from Picasso on GDAX, Picasso then buys it back, at a massive discount on Bitfinex. No GDAX volume = No Bitfinex volume.

Bitfinex'ed statement

Moreover, Bitfinex’ed noticed that the activity of Picasso was mostly high when Bitcoin Cash was introduced as the bot drove the price of Bitcoin Cash to 200+% higher than the rest of the market within several minutes, due to the order books being practically empty.

At the moment of press, these are main market parameters of Bitcoin:

  • Average price: $13 867,90
  • Marketcap: $232 457 900 170
  • 24h volume: $10 630 400 000

Bank of America: Cryptocurrencies Are a Threat

Bank of America (BoA) has admitted to US regulators it can not pretend any longer that cryptocurrencies are not a threat
23 February 2018   128

On February 22, the report was filed with the US Securities and Exchange Commission (SEC). It listed a range of economic, geopolitical, and operational risks that the Charlotte, NC-based bank faces as it heads into the new fiscal year. Crypto adoption was on the list for the first time.

Bank of America (BoA), which recently banned purchasing of crypto with credit cards, stated that this and other similar policies could cost the bank clients.

Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies.

The second largest bank in the U.S. said that adoption of cryptocurrencies could require the bank to make “substantial expenditures” to update its existing services and remain competitive with upstart firms.

The widespread adoption of new technologies, including internet services, cryptocurrencies, and payment systems, could require substantial expenditures to modify or adapt our existing products and services.

According to the Bank of America, cryptocurrencies could limit the institution’s ability to comply with anti-money laundering regulations.

Eventually, this is one of the first public admissions that financial institutions are beginning to worry that mass cryptocurrency adoption could one day become a reality.