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%.

Rng Security Camera Hackers Start Demanding Bitcoin Payments From Victims

The owners of a Ring doorbell security camera in Texas have been targeted by a bitcoin extortion attempt, which they managed to thwart simply by removing the device’s batteries to shut it off. The case, nevertheless, shows Ring security camera hackers are now demanding cryptocurrency payments.

According to a report published by WFAA, spotted by Gizmodo, 28-year-old Tania Amador revealed her Ring security system was hacked by hackers looking to cash in on their access to the device, by demanding a ransom of 50 bitcoin, equivalent to around $360,000.

Speaking to WFAA Amador stated:

I was asleep and our Ring alarm was going off like an intruder had entered our home. Then we heard a voice coming from our camera.

The voice initially started claiming to be from Ring’s support team, notifying the homeowner her account had been terminated by a hacker. It soon added that if the didn’t pay the 50 bitcoin ransom, she would be terminated as well.

The situation appeared to turn worse for Amador and her partners, as the hackers managed to make it look like they were just outside her door after compromising the security camera, adding to the pressure of the situation. Their response was to reach the device and remove its batteries.

Without their batteries, the hijacked cameras simply went off and the bitcoin extortion attempt ended. Ring has notably been at the center of a controversy after various reports pf its doorbell cameras being hacked started emerging. A report by Motherboard showed that on hacking forums, software used to hack these devices is being sold for as little as $6.

This type of software is often sold on the dark web, where vendors even list Black Friday deals to appeal to their customers. Speaking to WFAA, a home security firm claimed that these security breaches were a result of third-party data breaches that include Ring account details, and not a security flaw within Ring’s security system itself.

Featured image via Unsplash.