Is Bitcoin Trading a Dirty Business? With Willy Woo

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“In a very immature, thinly traded asset like Bitcoin, it takes just a few guys with all the ammo in the world to move it anywhere they want to take out the most traders. It’s a lethal combination.”
— Willy Woo

SHOW DESCRIPTION

Location: Zoom
Date: Sunday 10th May
Project: Hypersheet
Role: Co-Founder

On May 11th, at block 630000 Bitcoin had its 3rd halving, cutting the block reward issued to the miners from 12.5BTC to 6.25BTC. This reduction in the subsidy is seen by many as a bullish event for Bitcoin. With the block reward cut in half, the amount of Bitcoin available for the miners to sell in the market drops from 1800 BTC/day to 900 BTC/day, reducing the sell pressure from newly minted coins.

Bitcoin’s recent drop in price has been attributed, by some, to miners selling off some of their Bitcoin, to support lower revenues with the blog subsidy halving. 

While miners have typically been the largest sellers in the Bitcoin market, now that the subsidy has again cut in half, Willy Woo has claimed the majority of the sell pressure will not come from the exchanges.

Woo puts this down to the rise in popularity of the derivatives and futures markets on exchanges such as BitMex and Deribit. These exchanges take fees of up to 0.075% per trade and offer high leverage options of up to 100x. As the popularity of these exchanges has grown, so have the fees.

With the selling pressure from miners dropping and the sell pressure from the exchanges growing, is trading detrimental to the growth of Bitcoin?

In this interview, I am joined by Willy Woo, an on-chain analyst and the co-founder of Hypersheet. We discuss Bitcoin trading, the rise of the unregulated, high leverage futures platforms and if trading is damaging to the growth of Bitcoin.

TIMESTAMPS

00:05:00: Introductions
00:05:47: Recent decline in Bitcoin price
00:09:04: Spot and leverage trading
00:13:32: Sell pressure from miners and exchanges
00:18:20: Trading activity tax
00:22:40: Futures trading
00:27:46: Futures creating additional sell pressure
00:29:22: BitMEX
00:30:43: BitMEX’s failing auto-matching engine
00:34:00: Are exchanges trading against customers?
00:40:06: Should people trade?
00:43:17: Increased regulation and liquidity
00:46:51: Trading 101
00:50:15: How to learn how to trade
00:52:54: Risk management
00:56:03: Indicators Willy looks for
00:59:30: Final comments

 

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SHOW NOTES

PodcastPeter McCormack