How much it takes to pump Bitcoin by 1%
Bitcoin’s market cap recently topped $200B. As the market continues to swing upwards, some people may be asking themselves “what would it take to increase the price of Bitcoin by 1 percent?
Throughout this article, we will explore a recent instance of the market pumping by 1% to try to answer this question.
The core example we will be examining is the Bitcoin pump that took place on July 21st, 2020. Just aver 7:30 UTC Bitcoin began a sharp pump that continued for nearly 15 minutes.
Over that period of time, the price of Bitcoin went from $9216 to $9353. That represents an increase of 1.49%.
Data
Let’s start by examining the volume and trades that were executed across some of the most popular crypto exchanges in the market.
We evaluated each exchange by collecting every trade that was executed throughout the 15 minute pump. The primary Bitcoin trading pairs that were evaluated for each exchange included USD, USDT, USDC, EUR, and GBP pairs. Altcoin trading pairs with Bitcoin were not considered.
After collecting every trade over the period, we extracted the trades that were required to pump Bitcoin by exactly 1%.
The results for each exchange looked like the following.
Volume
Now, we can break down the exchanges by those that executed the most buy volume.
“Buy volume” is determined as the volume that was executed when the person that was acting as the taker in the transaction was buying Bitcoin. Although there was still a seller, the seller was not the taker in the trade, but rather the maker.
“Sell volume” is determined as the volume that was executed when the person that was acting as the taker in the transaction was selling Bitcoin for USD or another stablecoin.
Buy Volume (BTC)
Sell Volume (BTC)
Huobi led the market with almost 3,000 BTC buy volume and 3,800 BTC sell volume. Other top exchanges included Binance and OKEx, which came out swinging exceptional volume as well.
Trades
When we review trades, we get a similar story. Huobi once again played a major role with some of the highest number of trades, along with Binance and OKEx.
Buy Trades
Sell Trades
While some exchanges processed thousands of trades, exchanges like Gemini, BitMart, and Binance US were left on the sidelines processing only a few hundred trades in total among them.
Concerns
There remain a few unusual details in this data. Only 2 out of the 15 exchanges that were examined managed to have higher sell volume than buy volume. Those two exchanges were BitMart and Huobi Global.
Although that does not directly indicate fake volume, it is certainly suspicious. We can notice across the board that generally the more regulated exchanges had a higher buy to sell ratio for the volume. Of course there are likely other explanations, but fake volume has been a hot topic recently, so this is the first thing that came to mind.
What do you think of the data? We would love to hear your thoughts in the comments below!
Results
Combining the trades across all exchanges, the buy volume was 9750.73 BTC while the sell volume was 7235.13 BTC.
That’s equivalent to about $90,974,288.27 in Bitcoin being bought and $67,503,740.76 in Bitcoin being sold (priced at the time of the pump).
With a small investment of only $91M that could mean you might also be able to pump Bitcoin by 1%!
In other words, exchanges processed about $23M more buy volume than sell volume over the course of the 15 minute pump.
$90M is equivalent to 0.05% of the Bitcoin market cap. That means the market cap was moved by 1% with only 0.05% of the market cap in funds.
While some assets can be pumped 10% with only a few thousand dollars and a reckless desire for wrecking havoc on exchanges, Bitcoin is not one of those assets. Bitcoin requires significant volume over a short amount of time to cause such a large spike.
Conclusion
The next time you receive a $100M inheritance, don’t forget your crypto family. We could all use a 1% boost to our day.
Although this was just a fun examination of a single pump, we can use this simple study to highlight the increasing liquidity in the crypto market. Several years ago, trading $1M in Bitcoin would have torn through an exchange, causing the entire market to shake in its wake.
Today, some exchanges are able to handle $1M+ in trades without a problem. This increased liquidity demonstrates how quickly the market is maturing.
What crypto exchanges process the most trades each month? That’s the question we answer here.
Additional Good Reads
Case Study: Using Machine Learning for Portfolio Management
Cryptocurrency Trading Bots - The Complete Guide
Threshold Rebalancing for Crypto Portfolio Management
In a Nutshell Guide to Ethereum — Easy Ethereum Explanation
Crypto Users who Diversify Perform Better
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