While the many naïve Bitcoin investors have been lured to their slaughter by the Pied Piper Currency – the Hedge Funds and Major holders of the digital currency have made fortunes trading derivatives
Having a hoard of Bitcoins has facilitated Bitcoin derivative shorting – as holding the asset ensures short-sellers are protected from any real rebound in price. It is fairly clear that market price is being moved by derivatives players – with price recovery after each fall by repurchasers.
The question remains is what is the SEC doing to stem what amounts to insider trading and fraud in the Bitcoin trading arena?
Coindesk provides a market report on recent activity: “Bitcoin exchanges had their busiest day since November, when the price rallied from around $320 to hit a high of $427 in just two weeks. That rally saw 1.72 million coins changed hands. Just over a million coins have changed hands today so far.
Some of that trading volume has been generated by the burgeoning sector of digital currency hedge funds. Bitcoin’s recent return to volatility has been a bonanza for them.
One trader, Harry Yeh at Binary Financial, recounted trading over 20,000 BTC (about $6m) in a single marathon 20-hour session last month. He said today’s market action was getting close to that level.
“This is probably the best day of trading,” he said. “I’ve been trading for about 10 hours already.”
Swaps activity on Bitfinex, the largest US dollar exchange by volume, shows speculators split between longs and shorts.
Current hourly swaps shows shorts with 67% of the market, although longs had a 57% share at around 10:00, as the price rose. At press time, total active swaps still showed longs dominating, with a 76.6% share.
With the US East Coast still getting out of bed, exchange order books likely have a frenzied day to come.”