Bitcoin Cash: Fair Value or the Politics of Market Makers?
Updated
Bitcoin Cash is fun. I like Bitcoin Cash and Bitcoin. There is an Alpha dog battle going on right now.
On one hand:
Lightning Network, when???
On the other hand:
Scaling blocksize is just a BandAid, bro.
The woes of tech turmoil between Bitcoin and Bitcoin Cash are interesting. More interesting, the rise of Monero, IOTA and Cardano, in my humble view.
However, I am not here to place judgement on Bitcoin Cash in regard to the issue outline above. Much to the contrary, I think that this debate is healthy for the industry. My contention is this: How in the hell has Bitcoin Cash not absolutely dumped in terms of Bitcoin since this spike upwards following Coinbase/GDAX listing & why does Bitcoin Cash remain floating on its current Fib level? There seems to be baseline support at this particular price level -- for the moment -- and this is what I'd wish to discuss here.
A market maker is, "a company or individual that quotes buy and sell prices of an asset held in inventory; making their profit on a spread (difference in buy and sell price) or transaction fee."
According to this definition Coinbase and GDAX became THE market maker for Bitcoin Cash the moment that they opened up trading for Bitcoin Cash on GDAX, and supplied the market with Bitcoin Cash through funding wallets on Coinbase. I hypothisise that, all things being equal, a massive sell off of Bitcoin Cash should have occured the moment that liquidity was supplied to the market. This is the case - in every instance save few - when an ICO token is listed on an exchange. This INCLUDES Bitcoin Cash when it was first hard-forked from Bitcoin in August of 2017.
So what's the take away? This is where it gets interesting.
If Bitcoin Cash is being managed upwards, through the well timed and sheltered opening and closing of the market, then Bitcoin Cash's price will remain higher or constant through manicured markets. The net effect of this is to increase the price of Bitcoin Cash; therefore increasing the profits of market makers for Bitcoin Cash, IE Coinbase! It's a win for the big boys!
Now, this the action we are seeing but -- and this is a BIG BUTT -- where is the majority of trading volume coming from??? One may be surprised to learn that 60% or more of daily trading volume occurs on the Chinese exchange of OKEX! Furthermore, this exchange has Bitcoin Cash valued at about $500 (17%) less per coin than other exchange platforms. Well, interesting to know. However, this is much more interesting since a company that seems to be out of Shanghai, China called Hangzhou Alibaba Advertising Co, is mining the majority (or running majority of nodes) of Bitcoin Cash. Could this be the liquidity provider (market maker) in China, namely on the OKEX exchange?
bitnodes.earn.com/nodes/?q=Hangzhou+Alibaba
Interestingly enough, this may be the reason why there is liquidity and downwards pressure on the Chinese exchange, OKEX, while other exchanges are lagging in liquidity and have a higher price. In my opinion there is now only one question to ask: "You feeling lucky?"
Yes Bitcoin versus Bitcoin Cash is an exciting debate on technology and politics. However, I care more about my wallet. In this case it is my opinion that an increase of liquidity, or available Bitcoin Cash on the exchange, will push down the value of Bitcoin Cash in a market that has been propped up and manicured by market making.
One could say this is the oppocite of what the Bitcoin Futures are doing for Bitcoin right now, driving price down. Maybe I am blind, ignorant, or biased to the facts of the matter but it seems to me that Bitcoin Cash is headed for a crash, if not both Bitcoin and Bitcoin Cash.
We are in for a wild 2018. I love you all and for this reason I say HAPPY NEW YEAR!!!
Warning:
Do not invest or take these words as coherent. I do not know anything nor should anyone think that this is valid insight of any kind. Ignore this information.
On one hand:
Lightning Network, when???
On the other hand:
Scaling blocksize is just a BandAid, bro.
The woes of tech turmoil between Bitcoin and Bitcoin Cash are interesting. More interesting, the rise of Monero, IOTA and Cardano, in my humble view.
However, I am not here to place judgement on Bitcoin Cash in regard to the issue outline above. Much to the contrary, I think that this debate is healthy for the industry. My contention is this: How in the hell has Bitcoin Cash not absolutely dumped in terms of Bitcoin since this spike upwards following Coinbase/GDAX listing & why does Bitcoin Cash remain floating on its current Fib level? There seems to be baseline support at this particular price level -- for the moment -- and this is what I'd wish to discuss here.
A market maker is, "a company or individual that quotes buy and sell prices of an asset held in inventory; making their profit on a spread (difference in buy and sell price) or transaction fee."
According to this definition Coinbase and GDAX became THE market maker for Bitcoin Cash the moment that they opened up trading for Bitcoin Cash on GDAX, and supplied the market with Bitcoin Cash through funding wallets on Coinbase. I hypothisise that, all things being equal, a massive sell off of Bitcoin Cash should have occured the moment that liquidity was supplied to the market. This is the case - in every instance save few - when an ICO token is listed on an exchange. This INCLUDES Bitcoin Cash when it was first hard-forked from Bitcoin in August of 2017.
So what's the take away? This is where it gets interesting.
If Bitcoin Cash is being managed upwards, through the well timed and sheltered opening and closing of the market, then Bitcoin Cash's price will remain higher or constant through manicured markets. The net effect of this is to increase the price of Bitcoin Cash; therefore increasing the profits of market makers for Bitcoin Cash, IE Coinbase! It's a win for the big boys!
Now, this the action we are seeing but -- and this is a BIG BUTT -- where is the majority of trading volume coming from??? One may be surprised to learn that 60% or more of daily trading volume occurs on the Chinese exchange of OKEX! Furthermore, this exchange has Bitcoin Cash valued at about $500 (17%) less per coin than other exchange platforms. Well, interesting to know. However, this is much more interesting since a company that seems to be out of Shanghai, China called Hangzhou Alibaba Advertising Co, is mining the majority (or running majority of nodes) of Bitcoin Cash. Could this be the liquidity provider (market maker) in China, namely on the OKEX exchange?
bitnodes.earn.com/nodes/?q=Hangzhou+Alibaba
Interestingly enough, this may be the reason why there is liquidity and downwards pressure on the Chinese exchange, OKEX, while other exchanges are lagging in liquidity and have a higher price. In my opinion there is now only one question to ask: "You feeling lucky?"
Yes Bitcoin versus Bitcoin Cash is an exciting debate on technology and politics. However, I care more about my wallet. In this case it is my opinion that an increase of liquidity, or available Bitcoin Cash on the exchange, will push down the value of Bitcoin Cash in a market that has been propped up and manicured by market making.
One could say this is the oppocite of what the Bitcoin Futures are doing for Bitcoin right now, driving price down. Maybe I am blind, ignorant, or biased to the facts of the matter but it seems to me that Bitcoin Cash is headed for a crash, if not both Bitcoin and Bitcoin Cash.
We are in for a wild 2018. I love you all and for this reason I say HAPPY NEW YEAR!!!
Warning:
Do not invest or take these words as coherent. I do not know anything nor should anyone think that this is valid insight of any kind. Ignore this information.
Note
BCash has done well and just broke about the short term resistance trend on the Gann. I am now neutral on BCHBTC.Trade closed manually
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