Here's How You Could've Profited From Bitcoin's 20% Jump

Bitcoin has recently seen its price rise to the $5,000 mark, which it hadn’t seen since November of last year, when it plunged from over $6,000 to little over $3,000. The cryptocurrency’s rise, according to analysts, created profitable arbitrage opportunities for those using the right tools, and with the bravery to act quickly

According to a blog post published by CoinRoutes, cryptocurrency traders could’ve profited from BTC’s sudden jump by taking advantage of price differences across cryptocurrency exchanges during the 45-minute period it took for the cryptocurrency to gain 20%.

Per the firm, bitcoin’s rally was “extremely sharp and consisted of three sharp upward spikes, the third of which faded almost immediately afterwards.” These sharp moves occur, it claims, as most crypto investors are “ignorant of financial markets and others are manipulative.” As a result, CoinRoutes claims their method of asking for quotes “leaks information to the market.”

In a chart the firm provided from its platform, it’s possible to see that two of bitcoin’s spikes saw the best bid rise over the available offers on the market, with LMAX, a cryptocurrency exchange known for featuring market maker quotes, seeing the best bids.

Bitcoin's bids and asks during the surgeThe chart shows large spreads between Bid (buy) and Ask (sell) prices during the bitcoin price surge

CoinRoutes added that market makers on LMAX likely sold BTC to “an aggressive OTC buyer, and needed to buy back those Bitcoin, and the market responded.” This is noteworthy, its blog post reads, as arbitrage opportunities quickly surfaced.

So much so, that on some exchanges the difference per BTC was of over $300, meaning traders could buy one bitcoin for $4,460 at one exchange, and sell it at another for $4,780. This type of gap is reportedly rare nowadays thanks to arbitrageurs, and shows the buyers overwhelmed the bitcoin that was then being used for arbitrage, meaning arbitrageurs didn't have enough funds to close the gap during the agressive buying.

The third spike that’s in the graph, CoinRoutes adds, gave users a smaller arbitrage opportunity with the spread reaching a $70 maximum, which faded away quickly as the move was “created by momentum followers.”

The blog post adds that CoinRoutes algorithms are “designed to handle these situations,” and would allow its clients to avoid overpaying by directing orders to exchanges with lower prices. The firm further noted that trading on a single cryptocurrency exchange can put investors at risk, and that using algorithms can give them a “significant advantage.”

As CryptoGlobe covered, it’s believed bitcoin surged to $5,000 thanks to a 20,000 BTC buy order, that was “algorithmically-managed” across three crypto exchanges – Coinbase, Kraken, and Bitstamp. It saw  BTC/USD trading pairs get to nearly 75% of the cryptocurrency’s total trading volume against fiat currencies and stablecoins for a short time, up from its usual 15%.

Crypto Scammers Responsible for $24 Million in Bitcoin Theft Through First Half of 2020: Report

Michael LaVere
  • New Whale Alert report shows crypto scammers have raked in $24 million in bitcoin through the first six months of 2020.
  • One scammer leveraged YouTube advertising to steal $130k in BTC per day. 

Crypto monitoring service Whale Alert has published a report showing that crypto scammers are responsible for $24 million in bitcoin theft through the first half of the year, including the exploitation of YouTube advertising. 

According to the report “Chasing Crypto Criminals” published July 10, cyber-thieves are finding easy prey in the form of bitcoin and other crypto-asset investors. Whale Alert summarized its exhaustive reviews of hundreds of websites and thousands of reports of theft as “crypto crime pays. A lot.” 

Whale Alert claimed there was little risk involved for crypto-based criminals, despite the massive economic impact being imposed on victims. The report confirmed at least $38 million in bitcoin alone being stolen via scams over the past four years, excluding the use of Ponzi schemes. 

The report reads, 

Some of the most successful scams made over $130,000 in a single day with nothing more than a one page website, a bitcoin address and a decent amount of YouTube advertising.

Whale Alert outlined another scam which brought in $1.5 million over six months through promoting a fake cryptocurrency exchange. The report claims the advertisement took victims to an “amateurish website riddled with spelling errors,” before tricking users into depositing their funds. 

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