For as long as cryptocurrency trading has existed, there have been rumors regarding price manipulation. When looking at the price charts, it is not hard to see where that sentiment is coming from. Some new research conducted by Arcane research seems to indicate such manipulation is very real. As is always the case, that research needs to be taken with a few grains of salt.
Bitcoin Futures Aren’t Beneficial
Contrary to what a lot of people expected when the Bitcoin futures service providers came to market, their impact hasn’t yielded any real benefits. Although more traders can be exposed to cryptocurrency in a convenient manner, the effect this vehicle has on the daily price paints a very different picture. Arcane Research claims the Bitcoin price is always pushed down violently mere days before these futures contracts approach their monthly expiration date.
While this evidence is pretty overwhelming when looking at the CME Bitcoin futures charts, it is not the only service provider in this industry. CBOE and Bakkt are now also in the game, yet none of these three entities come close to the volume generated by BitMEX. On that exchange, such price manipulation doesn’t seem to exist. As such, one has to wonder if CME actually has any real impact, and as a result, is manipulating the market indirectly.
CME Trends are Worrisome
Unfortunately for CME, their seemingly negative trends do not end there. Although it seems unlikely the service provider is orchestrating all of this, one cannot argue with the numbers in front of one’s eyes/ The Bitcoin return before CME close chart in the Arcane Research findings are rather condemning. In over three in four cases, the days in advance of the contracts settling are negative, yielding a lower Bitcoin price. A very peculiar trend, and one that does raise a lot of questions which can’t be answered right away.
To make things even more confusing, it seems the Bitcoin price tends to fall on CME’s platform during times where the daily average return has been well over 2%. For some reason, traders of these futures – or Bitcoin itself – do not like those steep uptrends whatsoever. As such, their immediate response is to push the value down as quickly as possible, particularly before the contracts are settled. It is another worrisome and condemning piece of evidence which shows that there is a lot more going on with the Bitcoin price than most people anticipate.
Are the Claims Proven?
This is where things tend to get a bit uncertain. Although Arcane Research seems to confirm something fishy is going on with CME’s Bitcoin futures prices, one has to wonder if there is a real impact on Bitcoin itself from just that angle. Given the recent price fluctuations, it seems unlikely that this is the whole story – assuming any manipulation is taking place, to begin with. It is perhaps a cog in the machine, but nothing more than that either.