Crypto Coin Tether Defies Logic on Kraken’s Market, Raising Red Flags via @bloomberg

As Bloomberg reports, “In the traditional world of securities exchanges, it would be akin to defying gravity. But at Kraken, one of the most popular venues for trading cryptocurrencies, a coin called Tether does it again and again.

“Huge trades move prices about the same as small ones, ignoring the normal rules of economics, according to a review of Kraken’s public order book—a pattern that experts on market manipulation view as a red flag. The mystery is bracketed by another quirk: Oddly specific order sizes—many going out to five decimal points, with some repeating frequently. Another red flag.

“Andrew Rennhack, a former professional poker player who’s taken an interest in cryptocurrencies, got the discussion started when he began downloading data from Kraken’s order book and puzzling publicly about what he found. Bloomberg News did its own analysis, pulling more than 56,000 trades placed on the exchange between May 1 and June 22 and sharing the information with New York University Professor Rosa Abrantes-Metz and former Federal Reserve bank examiner Mark Williams. Both agreed that they’d never seen a market behave like Kraken, where large Tether orders fail to sway prices much.”