Inside Job? What Exactly Happened To Bitcoin Price On September 5th?

Inside Job? What Exactly Happened To Bitcoin Price On September 5th?

Between Wednesday September 5th and Thursday 6th, the Bitcoin price went berserk, falling from a $7,400 high straight down to a sad $6,400. In precise terms, about 14% in value of the biggest and most popular cryptocurrency evaporated overnight. That’s after gaining steadily over the last few weeks.

The Case Of Goldman Sachs And A Trading Desk

The fall happened after news broke that Goldman Sachs had rescinded its earlier decision to pursue the launch of its own crypto trading platform. Well, the impact of this incident on the market seems to present some very dark areas that some experts are wary of. First off, opinions from scientists working for an AI (Artificial Intelligence) analytic firm indicate that there might have been some foul player involved.
However, while at a TechCrunch conference in San Francisco on Thursday, the CFO of Goldman Sachs, Martin Chavez, disputed any claims that the bank had been considering setting up a trading platform, saying that such was fake news and that Goldman Sachs has never set any timeline for building such a trading desk.

Bitcoin Dump

After this utterance, things went south for the popular cryptocurrency as a 10,000 Bitcoin dump happened shortly before the bank’s announcement. The coins were worth $74 million.
While it happened, the AI at RoninAI website detected an unusual activities happening in the trading environment. The suspicious activity was the Bitcoin dump, and it caused the crypto price to dip by $350 within 2 hours.
Looking at its online blog, the AI firm has always advised crypto investors not to blindly follow crowd sentiments, but that’s exactly what appears to have happened on Wednesday. Successful crypto traders are always keen on what the crowd says and how that affects the market dynamic, but they’re always skeptical of insignificant factors.

Foul Play?

According to SEC, moving to sell or buy a security on the basis on information not availed to the public and in breach of binding confidence or trust constitutes an illegal case of insider trading. However, the sad truth is that it’s very hard to actually pin-point cases of insider trading and market manipulations due to the absence of a definitive regulatory system for cryptocurrencies.
Just this last March, Coinbase fought off a lawsuit by aggrieved investors who accused its employees of dishing out tip offs to traders right before Bitcoin Cash (BCH) was listed on the trading platform. Apparently, the tip off led to the upsurge of BCH’s value. However, Coinbase’s investigation into the claims found no wrong doing on the part of its employees.