Japanese Yen Potentially Being Used to Pump and Dump the Markets

Japanese Yen Potentially Being Used to Pump and Dump the Markets

Foreword

This is actually a new theory that I came across, but I believe that it is corroborated with a significant amount of evidence.

The purpose of this article will be to challenge everyone to look into the same phenomenon. At this moment of time, the suspects in question are Quione and bitFlyer. Quione specifically has a highly unusual volume of BTC/JPY — especially given their relatively low exchange overall as an exchange.

This level of volume between the two traded pairs is also not exhibited between JPY and any other cryptocurrency. For instance, Ethereum, the second leading cryptocurrency in terms of market capitalization, only has about $3k-5k/24 hours worth of JPY volume, compared to the $100m+ that is often generated for JPY.

Below is the research that I have conducted. This won’t be as formal as some of the other articles that you have read by myself because this is mostly a composition of notes and observations that I have compiled together to publish for you all.

I’m not asserting that this is empirical fact, obviously, but my hopes are that this will inspire others to look into the phenomenon and perhaps encourage a greater discourse where others start really looking into the volume flows of different coins and currencies.

JPY and KRW Volume Pair Analysis Research Report

While doing my initial research, I stumbled across this link here:

https://www.bloomberg.com/graphics/2017-bitcoin-volume/ t

I had no clue that the Korean Won was responsible for 53% of all volume of cryptocurrency purchases in November.

What’s really weird is when the spike happened and when it died off, check this out:

Korean Won only represented 9.3% of those purchases on September 23rd, 2017.

In just a little over two weeks, it was providing 62.8% of the volume.

Unless the USD, Euro, Yen and Yuan’s volumes suddenly plummeted, then the Won spiked out of nowhere.

Bitcoin is also considered a currency on this list. So base traded pairs like XRP/BTC for instance would count as volume via BTC.

Check out how high BTC purchases sparked on October 1st.

Then it was back down to 25.7% a little over a week later on October 10th, 2017 (same time that the Korean Won had spiked in volume of trading compared to other currencies).

What’s interesting is that the volume of Korean Won purchases abruptly dropped in December leading up to the ‘top’.

In fact, it wasn’t just the Korean Won, it was most currencies that had dropped in terms of their volume of transactions in relation to the others.

Bitcoin-related transactions took front stage once again in December and reached its peak in 12/17.

The author just finds it interesting how the highest volume of Bitcoin trading came on the very day that the ridiculous bull run increase started and the very day that the bull run ended.

Almost as if there was some sort of coordinated, pre-planned effort to get in and out of the market at a certain time.

Now sure, we could attribute 12/17 to the influx of people that knew Bitcoin was well overextended and that it would more than likely shorted by Wall St. investors (that openly said as much), and that the holidays would be coming to an end soon, which usually precedes January/February consolidation.

But what explains October 1st?

And more specifically, what explains the specific increase in Bitcoin and not all other currencies? Coinbase was the #1 app in the United States during that December time period.

Surely, there had to have been a massive influx of U.S. dollars that were coming in for that to be true.

All of the listings on Coinbase at that period of time (Bitcoin, Litecoin, Ethereum, and later BCH) can all be bought w USD on Coinbase and those purchases would’ve contributed to the proportions we saw on the chart there.

With that being said; let’s take Bitcoin as a currency out of the creation and specifically look at the proportion of fiat currency volume spending in relation with one another on Bitcoin.

Now we get even more insight. It appears that the Korean Won that was being injected in the markets wasn’t being spent on Bitcoin.

The Japanese Yen actually ended up dominating 67.9% of Bitcoin’s fiat trading volume on November 18th, 2017.

Analyzing CryptoCompare Data

Check this link out:

Bitcoin (BTC) – Live Bitcoin price and market cap

_Live Bitcoin prices from all markets and BTC coin market Capitalization. Stay up to date with the latest Bitcoin price…_www.cryptocompare.com

Something worth mentioning is that the raw number of Bitcoin purchased by the Japanese Yen quadrupled from January 28th to February 1st.

By February 5th it was up 5x the amount seen on January 28th and once again gained dominance among all other currenceis (Korean Won on appreciated modestly over this time period; once again, Korean Won does not appear to be something heavily invested in bitcoin specifically, but rather in altcoins but more on that later).

Let’s take a look at how the price of Bitcoin was impacted right after that happened:

The volume of Japanese Yen, in terms of raw injected currency + bitcoin purchased (remember bitcoin fluctuates in value so these numbers are different; i.e., buying 10 BTC at $20k = 20 BTC at $10k), is something that interests me greatly.

On a social and fundamental level, there have also been a number of interesting events that have transpired in Japan in 2018.

Litany of Concerning Events in Japan

  1. https://www.reuters.com/article/us-crypto-currencies-japan-announcement/japan-punishes-seven-cryptocurrency-exchanges-over-regulatory-lapses-idUSKCN1GK05Y
  2. OKex is in Japan (which has retained #1 status in terms of volume on CMC for a few weeks at this point; also looking to move to Malta). They also were facing major censures by the Japanese government; https://cointelegraph.com/news/worlds-second-largest-crypto-exchange-okex-moves-to-blockchain-island-of-malta
  3. Huobi is in Japan (although it recently suspended trading w Japanese clients late June; https://www.coindesk.com/huobi-pro-exchange-to-suspend-crypto-trading-in-japan). They, too, were more than likely under major scrutiny by the Japanese FSA (sort of like the U.S. SEC): https://www.coindesk.com/huobi-pro-exchange-to-suspend-crypto-trading-in-japan/
  4. KuCoin suspended its services in Japan after it would have (or already did) face major scrutiny and questioning from the Japanese FSA; https://bcfocus.com/news/after-huobi-another-crypto-exchange-kucoin-to-stop-trading-in-japan/17375/
  5. Binance (whose owner, CZ, used to the be an OKex exec), also closed down shop in Japan and moved to Malta; https://www.ccn.com/cryptocurrency-exchange-binance-facing-regulatory-pressure-in-japan-report/

Oh, and let’s not forget the biggest hack in crypto history happened there as well. So, we definitely can’t sleep on Japan.

Although, it may be Malta that deserves the most scrutiny at this point.

It used to be Hong Kong before it was Korea. It seems as though a lot of these blockchain companies are scrambling from jurisdiction to jurisdiction in search of a haven — Which is weird, because you would think that 100% legitimate exchanges with 100% legitimate business practices that are making billions (according to CZ), would have absolutely zero trouble just simply becoming regulatory compliant.

I mean, it’s not like these governments are saying crypto is banned (they aren’t; I checked). They’re just asking for some regulations to be followed.

The fact that the response to that is to move your base of operations to an entirely different geographic region is baffling to me; unless you’re doing things you know you’d be punished for under regulatory law.

But hey, what would I know? Just a theory.

More Interesting Observations

Just another interesting observation on $BTC.

Correction_: That’s not a spike in the amount of Bitcoin purchased, that’s just a spike in the volume of Bitcoin traded_ ^^ From what I’m seeing, it seems obvious that Japanese Yen is used to pump up the markets and Bitcoin is dumped back into Tether.

In my opinion Tether isn’t being used to pump up the bitcoin markets, that’s the job of the Japanese Yen. It appears that Tether is being used to wash that Japanese Yen into U.S. currency once the Bitcoin is dumped after being pumped.

I’m like 90% certain of that theory above. I’m eager to put this research out actually.

At first, my interest was just in looking at the various months of performance for Bitcoin and traditional markets (spoiler alert: September is the absolute worst; bar none and October is the most volatile but has ended more bear markets than its started), and I needed to justify why I was using U.S. markets, so I looked up stats to try to back up that theory and I landed down this rabbit hole.

Another Interesting Observation

During the price run in July 2018 (just last month), the volume of Bitcoin trades w Japanese Yen spiked through the roof.

That number dropped off of a cliff come July 31st.

Tether’s numbers simultaneously jumped up. There’s almost an inverse relationship between the two (at times).

However, the activity of Tether moves independently of the USD (the damn currency it’s supposed to be pegged to and based upon…)

Price fell off a cliff the same day the Japanese Yen volume dried up.

This is a full 7–8 days before the Van Eck ETF delay news came by the way.

I know these aren’t the price charts that everyone is looking for, but I be damned if this information isn’t a whole LOT more important than any price chart that I can throw up here.

I can’t yell fire on this yet, but there’s a whole hell of a lot of smoke in the room right now.

Conclusion

In my opinion, when Tether is dominating the volume traded among all other currencies, it should be expected the market is dumping heavily. and when the Yen is gaining dominance over the market (hitting the #1 spot), it seems like the market is accumulating heavily.

Now, it’s possible this isn’t coordinated at all; but if this was choreography, it would bring a tear to the most ardent critic’s eye.

Now, it’s possible this isn’t coordinated at all; but if this was choreography, it would bring a tear to the most ardent critic’s eye.

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