How Savvy Crypto Traders Gamed Coinbase's Latest Listing for a 35% Payday

[jings009]

If there's money to be made in the crypto markets, you can bet traders will be the first on the scene.

Such was the case at least last week, when Coinbase Pro, the cryptocurrency trading platform operated by San Francisco startup Coinbase, announced it would list the cryptocurrency 0x (ZRX), a move that put the "Coinbase effect" on display when ZRX surged nearly 40 percent on the news.

That perhaps isn't so much of a surprise. Coinbase is the largest U.S. cryptocurrency exchange by volume, and recently valued at $8 billion because of its millions of users, a common byproduct of new listings is a double-digit price surge.

Still, it wasn't just Coinbase that got a tip off about the listing prior.

Data shows prices for ZRX began to surge on other exchanges a few minutes before Coinbase made its official public announcement at 17:00 UTC. But while there were whispers online about the possibility of insider trading, a charge the exchange has denied in the past, there's another explanation that is perhaps more plausible.

Savvy traders may have been simply making use of well-timed trading bots, computer programs that automatically scout technical price charts and exchange APIs to identify actionable and profitable developments. The bots can then either immediately act on their findings by placing a trade, or send a signal to their users in the form of a message via social media.

It's often free to receive the signals, but bots capable of placing trades generally come at a cost.

Altcoinnotify, for example, is a bot used only for signals only, and is free on Twitter. On the other hand, more expansive and customizable bots like Cryptohopper, which are capable of placing instantaneous trades based on multiple signals, can cost $20 to $99 per month.

If traders would like more control over a bot, they can even program their own. Estimates suggest experienced programmers can put together the code in just a few days, though it remains a matter of expertise to search for the right buy and sell signals.

In the case of this particular listing, API bots like Lightingsignal appear to have been designed well enough to read Coinbase Pro's API and notice that it had added a new cryptocurrency to it's server. As can be seen in the image below, the bot sent out a signal via Twitter at 16:57 UTC, four minutes before the public announcement.

Cryptocurrency trader Johnny Moe explained how such a signal can give a significant advantage, putting them a leg up above traders seeking to place their own bets on exchanges.
More here: https://www.coindesk.com/how-savvy-traders-gamed-coinbases-latest-crypto-listing-for-a-35-payday/

[cowz]

Same thing happened to ethereum classic when it got listed on actual coinbase, not pro. There was a pump, but then it came down like all coins. Zrx holders should take note and dump quickly