Dec

20

BTC Questions, from Jeff Watson

December 20, 2017 |

Please excuse my ignorance.

Grain traders know how many cents a certain size order can move the market, and bond traders know the effects of big orders. For those trading Bitcoin, how much will the cash market move on an exchange if one is selling 1 coin, 50 coins, 100 coins, 1000 coins? Is the market thin, how liquid? Is the b/a spread narrow in the futures? Does the b/a spread vary during different times a day? Are any retail business allowed to go short yet? How many BTC's are for sale (real orders) at any given time? What constitutes a "Big order" in both cash and futures BTC? What time of day offers the most liquidity? Thanks.


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7 Comments so far

  1. Erich on December 21, 2017 6:20 am

    For a decent real-time view of the cash market, see https://cryptowat.ch/gdax/btcusd/6h . You can see market depth, spread, and time and sales for the GDAX exchange (owned by Coinbase).

  2. B on December 21, 2017 2:10 pm

    Don’t know how many out there actually trade short term, the sentiment is more of a buy and hold crowd.

    You can see most of the markets the spot trades in here: https://coinmarketcap.com/currencies/bitcoin/#markets

    You can see those order books at the exchanges directly.

  3. anand on December 21, 2017 9:37 pm

    The more I read about this market the more Bitcoin and its offshoots look like Railroad stocks in the late 1800s. Behind the shadows there are ‘whales’ who own large blocks with the credulous public chasing the market higher. Every time there is a mini panic these guys come in and support the market like a modern version of Jay Gould. For the time being they are seen as kind benefactors with some kind of wispy greater goals in mind (to save the market/solve global poverty/give humanity its freedom etc). I reckon they are pushing the market up together to liquidate their holdings on the gullible public. A couple of days ago LiteCoin founder said he’d liquidated his whole holdings as he didn’t want a conflict of interest. When it all crashes and the publics savings are wiped out there will be wailing and hand wringing but who are they going to complain to? After all bitcoin buyers think the establishment is out to get them which is what drew them to go ‘off piste’ in the first place!

    In response to your question, I don’t think many people are ‘trading’ bitcoin. We know the stress trading financial markets with a fraction of the volatility. Anyone who tries to trade these tokens is going to have a heart attack within a month. They are a mixture of ‘real money’ (money launderers/criminals gangs and rogue states like N Korea doing off the system transactions) and ‘long only investors’ most of whom are investment neophytes. The latter are the second coming of the silver brigade we saw a few years ago. In fact I think the Silver tin hat lunatics have migrated to Bitcoin and other tokens and picked up other followers along the way. Check the Silver price vs. Bitcoin movement (people have mentioned Gold but I think Silver is the one which is inversely correlated although I need to test it).

  4. Dan on December 24, 2017 1:15 pm

    The GDAX site is free to use with no sign-up. To check out market structure you don’t need to go through other sites: try gdax.com. Bid-ask is typically $0.01, the minimum trading size, but there’s a 25bp commission (with volume discounts, and 0 commission for market makers). Right now, at $14,000/BTC, you can sell 100 BTC at 13,890, or 1,000 at 12,800. Symmetrically, 1,000 BTC will cost you up to 15,800 (prices change pretty linearly with size). If you’re willing to go to 25,000, you can buy 10,000 BTC. These are standing orders on the exchange, so if you put in a buy order at 15,800, you should theoretically get filled with all the offers from 14 to 15.8k. I haven’t tried it. Is that a good market? How do you measure goodness in this context? Many of the participants have a basis at 1/10th or less of current prices, so that must have an effect.

    This is all on one exchange. Gemini is another big one in the US (arguably even more reliable), and there are hundreds of others. The Asian exchanges have much bigger flows. Helps to be able to transact in Won.

  5. russell thomas on December 24, 2017 9:26 pm

    BITMEX is the futures exchange for bitcoin. Its based in hongkokng and its quite liquid with over a billion usd trading volume a day

  6. B on December 29, 2017 12:29 pm

    Bitmex is actually registered in the republic of seychelles. Good luck disputing a glitch on that platform.

  7. Pierre Aribaut on December 31, 2017 5:06 am

    @russel thomas : is that BITMEX itself that claims that liquidity ?

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