After the announcement of listing the cryptocurrency 0x (ZRX), the price of ZRX surged nearly 40 per cent.
Last week, Coinbase Pro, the cryptocurrency trading platform which is operated by the largest cryptocurrency exchange of the United States, Coinbase had announced that it would list ZRX. After the announcement ZRX felt the Coinbase effect when the new listing reported a double-digit price surge.
Coinbase is a cryptocurrency exchange which is based in San Francisco, California. Coinbase is the largest United States digital currency exchange by volume. Because of its millions of users, the platform is recently valued at $8 billion. Coinbase is the broker exchange of cryptocurrencies such as Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum, Ethereum Classic, and other cryptocurrencies with fiat currencies in over 32 countries.
ZRX price surge is not just because of Coinbase announcement, according to real-time price data the price of ZRX started to surge, on other crypto exchanges a few minutes before the Coinbase announcement. Online there were whispers about the possibilities of insider trading so the price surge can be a result of insider trading. The exchange has denied the insider trading charges in the past. It can also happen that the savvy traders may have been using well-timed trading bots or computer programs which automatically analyse the technical charts and exchange APIs to identify actionable and profitable developments. As soon as the bots find a profitable situation they place the trade or send signals to their users. Usually, bots that send signals are free while bots which are capable of placing the order often comes with a cost. To take more control over bots traders even program their own. In the case of ZRX listing, the bots are designed so well that it can read the notice of Coinbase Pro’s API and notice that it had added a new cryptocurrency to its server. As soon as the bot noticed, it sent out a signal via Twitter four minute before the public announcement.
According to crypto trader Johnny Moe,
“By the time a manual trader would see the API addition, and navigate the exchange UI, log in with 2FA, navigate to the trading page for the coin in question, fill an order entry, etc., the price is already moving up from trading bots having made their purchases.”
In that four-minute time span, the price surged around 13 per cent and reached a 24-hours of $0.91. With the help of an API bot, the user would be able to capture as much as 35% profit while the general public would have to satisfy with modest 18 per cent gain.