Was Bitcoin Price Drop Insider Trading Goldman Sachs News?

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The Cryptoverse

5 min readSep 6, 2018

On Today’s Episode of The Cryptoverse…

I’d pushed back the video I was working on to bring you this urgent report and clarify the situation with the Bitcoin price falling suddenly.

Episode Transcript & Notes

3 days ago I released a video entitled:

“BTC Shorts Increase 50% As $100m of Tether Moves To Bitfinex.”

In that video I gave you a heads up that someone was betting big that the Bitcoin price in US dollars was about to go down.

And then what happened? 2 days later the Bitcoin price dropped by around 15%, which was a $1,000 fall from around 7400 to around 6400.

If you missed that episode or if you’re watching one of my videos for the first time, here is the link to that video which jumps to 7 minutes 43s, which is where I start talking about what the news could mean. For your convenience, the same video is embedded below at 7 minutes 43 seconds:

9m and 57s into that video I say that I thought placing a $70m short sell on Bitcoin right now was unwise. Turns out that trade was very profitable since the Bitcoin price fell hard and made short sellers some good profits.

Bitcoin & Goldman Sachs In The News…

While reading the conversations online about this situation, I’ve seen many people suggesting that this short seller may have been operating on inside information…

Because what happened within days of my publishing that video?

Goldman Sachs goes public with their decision to drop plans to launch a cryptocurrency trading desk for the time being. It was October 2017 when we first heard of their plans to open a crypto trading desk.

The general consensus of opinion is that this is the main cause of the price drop, and that lead to speculation that the short seller knew this was coming and got into position betting the Goldman Sachs news would cause the price to fall.

Now I don’t want to sound like a traitor, but this is a situation that lawmakers could use to justify regulation. As long as the crypto markets remain unregulated, inside trading and all manner of other market manipulation is allowed to flourish.

So we have to decide individually which way we want it.

Do we want to leave it as a free and unregulated market, which means allowing the bad acts the same freedom?

Or do we want the protection of regulation, which restricts OUR freedom but also limits the damage from bad actors?

My personal opinion is to go with the free market option since market manipulation is constant in traditional financial markets, despite extensive regulation.

So this Goldman Sachs news has been reported extensively by the crypto media outlets.

Once I’d seen 8 different outlets reporting the story I stopped counting.

I’ll put links to all those articles in the sources if you want to go through them.

That’s actually another key driver of price.

The extent to which a piece of news affects the price is closely related to how widely it’s reported.

Think about it, if only one small news outlet broke the news, only a small group of people would become aware of it and then act on it. It would then take time for the news to spread by word of mouth, if at all.

The broader the awareness of the news, the larger the group of people take action on it, and then bigger the impact on the market.

This is another example of what I mentioned in the previous video about buying into false perceptions of reality and then making investment decisions on them.

I’m not saying this is fake news, but what I am saying is that the news is not based on an official announcement or press release from Goldman Sachs themselves.

It’s almost entirely based on an article from Business Insider who claim they got the information from “people familiar with the matter”. Which is pretty weak.

https://www.businessinsider.com/goldman-sachs-retreats-from-launching-crypto-trading-desk-2018-9

Again, we don’t have anyone from Goldman Sachs on the record…

Yet the fact that the price has reacted to the news means a whole bunch of people are taking it as true, and interpreting it as bad news.

This kind of is an annoyance to me because I planned to work on a much more valuable video today about some significant develops in the fundamentals of both Bitcoin and Bitcoin Cash.

But instead, I’ve had to push that back to make this video in order to bring some clarity to this situation which is time sensitive.

So I hope it has been worthwhile for me to allow myself to be distracted from the video I had planned to bring you this more urgent analysis.

If you your anxiety level has reduced in any way as a result then please let me know in the comments.

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