Now that the Bitcoin price is dropping all over the world again, the conspiracy theories are slowly coming out regarding what could be the cause of this problem. While the obvious culprit would be the current block size debate, some people are pointing the finger of blame to certain Bitcoin exchanges trading below the market price. Is there a bot at work or are these aggressive traders purposefully driving down the price? The answer is probably the latter.
Coinbase Trades Well Below Market Bitcoin Price
One Reddit user pointed out how the current Bitcoin price on the Coinbase exchange is a lot lower than the current market average. While it is not uncommon to see small discrepancies between the market value of Bitcoin on average, and the Bitcoin price per individual exchange.
That being said, the platform was trading a whopping US$20 below the current Bitcoin price on the markets, which is rather unusual. It was only a matter of time until someone tried to label this as a conspiracy by the Coinbase exchange to purposefully drive down the Bitcoin price.
Trading behavior on any Bitcoin exchange is mostly determined by the traders themselves, although some people might perceive these actions as a trading bot. Such allegations always seem to come up when the Bitcoin price goes up or down by a significant margin in a short amount of time, similar to what happened to the Mt. Gox exchange a few years ago.
In this case, however, there seems to very little legitimacy to these claims, as the traders are driving down the Bitcoin price for some reason. Looming uncertainty regarding the Bitcoin block size and how the network will scale were bound to have that effect sooner rather than later, although it remains to be seen whether or not this has anything to do with the decline.
The Reddit community seems to be thinking along the same lines, as it sounds very unlikely an aggressive trading bot would be used by Coinbase themselves. After all, they stand to gain very little from manipulative downward pressure, although the spread between other exchanges can create attractive arbitrage opportunities. Those opportunities could be taken advantage of by more experienced traders, which could lead to more interesting Bitcoin price action over the next few weeks.
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