Introducing “Gujjar” The bot responsible for Bitcoin price fluctuation in Coinbase

It has been sometime since i posted an article on my blog, it’s because i am juggling a lot of things right now. Foremost of all of them is my Ph.D which i recently started. Putting all of that behind, i wanted to write this article to answer one of the most asked questions on the Internet nowadays.

“How did bitcoin price go up so quickly”

Most of you are of the idea that bitcoin is a decentralized resource and the price fluctuation depends purely on number of cash flow positive transactions and circulating volume. But lesser do we know that the prices of a crypto currencies can indeed be manipulated. By now i think that i have your attention and the question you all must be asking is that. How the heck is it possible?

Enter “Gujjar” The trading bot that is responsible for manipulating the bitcoin price in coinbase’s exchange GDAX. For reference “Gujjar” was the pastoral agricultural ethnic group who were the best farmers of their time and were responsible for setting price of crops throughout the sub-continent.

I don’t think that coinbase itself is behind this bot, but i also don’t think that this bot limited to coinbase’s exchange only.

So there is this technique used by market traders and financial analysts using which they manipulate share prices and costs. In crypto currencies there are a number of methods to do that, I have been observing GDAX for about six months but now i believe that i have enough evidence to prove my claims

The above video is a screen record from GDAX on December 17, that was the time when bitcoin prices on Coinbase were several thousands of dollars skyrocketed compared to the other exchanges.

I do not believe that this volume of transactions and price fluctuation is due to an organic demand of bitcoins, but due to a specifically designed bot that trades and ends up hitting an empty orderbook. Because of this situation, coinbase has been ten folds ahead of other exchanges. Here is how it worked

A buyer buys BTC from Gujjar on GDAX, Gujjar then buys it back, at a huge discount on Bitfinex. No GDAX volume = No Bitfinex volume.

So the question here is Why would someone be manipulating BTC prices using GDAX?

It happens so that having difference in prices in different exchanges have a direct affect on purchase volume. If someone buys BTC from one exchange with lower price, and sells it another exchange at a higher price, it directly impact price fluctuation if done exponentially.

This also allows this trader to make a load running arbitrage between Coinbase/GDAX and Bitfinex.

But, What about Bitcoin Cash?

As we all know that price of bitcoin cash went up 250% on coinbase within minutes, this cannot be possible by organic demand because no one was aware of the bitcoin cash release. This shows that Gujjar bot is very aggressive in its trading. Due to the quick buys and sells the orderbooks became empty and because of that the price of bitcoin cash went up like crazy

The only reason that bitcoin cash’s price were observed this way was because the gujjar bot started out very early in its case. But coinbase suspended BTC Cash’s trading which drove the price’s to normal afterwards.

There were orders of 95 Bitcoin Cash on GDAX worth of 8500 USD, This is the handy work of Gujjar manipulating the prices. Investigation of such aggressive accounts is required on coinbase because no legitimate accounts place such orders.

All of this evidence points to the fact that bitcoin prices indeed up due to an artificial demand being created and supply being put to nill which created shortage and that resulted in prices where they are now.

I am sure most of you hate me for this right now, because all of believed that bitcoin prices are truly organic but no they can be manipulated and they have been as i have proven. Like me or hate me but it is the truth

Until next time