Research: Who is suspected of insider trading "rat trading" on Coinbase and Binance's new coins?
Research: Who is suspected of insider trading "rat trading" on Coinbase and Binance's new coins?
This research looks at the price movements of Binance and Coinbase in the week prior to the launch of new coins between November 2017 and February 2022 to determine whether the positive impact of the launch is reflected in the market ahead of time. These two exchanges were chosen because they have the largest trading volume in the spot market and have a greater impact on the prices of the coins that go live.
For the new coins, we have selected the pairs announced in the announcement of the new coins, most of the new coins are quoted in USD, USDT or BUSD, and a few of them will correspond toETHThe prices are hourly open prices. The price we selected is the hourly opening price, backward from 0:00 am UTC on the date of the launch announcement to 0:00 am UTC 7 days ago. For example, if Coinbase announced the launch of ETC on August 8, 2018, then the data we capture is the hourly opening price from 0:00 AM UTC on August 1 to 0:00 AM UTC on August 8. Since the prices of different currencies vary greatly, for comparison purposes, we have normalized all prices by dividing them by the first opening price (i.e. the first price data) before 7 days ago. Therefore, the first price is 1. Assuming the last price of a coin is 1.5, it represents an increase of 50% in 7 days.
In addition, for coins that have risen too much (more than 1x) we will list them in a table and search for positive news within the same time period one by one, trying to exclude interfering events. It should be explained that the new coins we selected are based on announcements and news, coins beyond this range are not collected.
Coin Bank
A total of 135 new coins were selected on Coinbase, of which 17 coins had a launch price that was the initial launch price, so there was no price data for the past 7 days, so they were removed. The final result includes 118 coins and is shown in the chart below.
Among them, 18 coins rose more than 1 times, accounting for about 15.3%. The biggest gainer was SHPING, announced online on January 20, 2022, with a maximum gain of 6.6 times in 7 days. The table below shows the maximum 7-day increase for 18 coins (graphical data are taken from the last day's opening price, but the highest price is chosen for the table data) and good news.
Coin Goes Live Day 7-Day High Gain in 7-Day Positive News NMR2020/8/133.088 Raises $3 Million; Launches Numerai Signals beta UMA2020/9/33.952 Community Proposal Vote NU2020/12/12.106 None STORJ2021/3/242.100 None NKN2021/4/84.593 no MLN2021/6/92.288 Founder El Isa discusses with Vitalik at CFA SummitDeFiFuture KEEP2021/6/162.149 community proposal ballot ACH2021/8/36.034 no IOTX2021/8/112.663 announced release uTrade v2QUICK2021/8/112.229 no REQ2021/8/123.987 no DDX2021/9/13.698 no SUKU2021/10/282.226 no COVAL2021/12/72.409 no NCT2022/1/132.19 no SHPING2022/1/207.626 no PLU2022/1/252.134 no QSP2022/2/32.748 no
After removing these 18 coins, 100 coins remain, and their price trends are shown in the chart below.
Intercepting the last hour of prices, the distribution shows a clear right skew pattern with a median of 1.226 (up 22.6%) and an average of 1.243 (up 24.3%). And that's if we exclude the 18 coins that are up more than 1x, if we add all of those, the average would be 1.476.
Of course, since most coins go live in a bull market, it is possible that the broader market is in an uptrend the week before they go live. In order to exclude this distracting factor, we have for each coin the week before it goes liveBTCThe trend was also counted as a comparison.
It can be clearly found that the BTC increase is more evenly distributed, with a median of 0.992 (down 0.2%) and a mean of 1.006 (up 0.6%), with no significant right-handed distribution.
Cryptocurrency
There were 311 new coins on Binance, 144 of which were launched at the initial price, so there was no price data for the past 7 days, so they were removed. The largest increase was for SHIB, which was announced on May 10, 2021, with a maximum increase of 10.3 times in 7 days. The table below shows the 15 coins with the highest 7-day increase (graphical data are taken from the last day's opening price, but the highest price is chosen for the table data) and good news.
Coin launch day 7-day highest increase in 7-day positive news NPXS2018/6/202.146Coinrail lost NPXS in hacking incident recovered; community proposal vote HIVE2020/4/277.007 online HuobiCOMP2020/6/255.531community proposal vote JST2020/8/ 113.041 online Gate, KucoinANT2020/8/132.031 added Loopring pay; community proposal vote NMR2020/8/173.110 online CoinbaseWNXM2020/8/262.059 no YFII2020/9/15.407 network upgrade; buyback 12.41% and destroy.BalancerLiquidity for YFII SWRV2020/9/152.496 Community Proposal Vote ASR2020/12/232.279 None FIS2021/3/32.148 Opening FIS Pledge Pool CFX2021/3/292.211 Partnering with OKEx Chain EPS2021/4/22.599 None SHIB2021/5/1011.289 None KEEP2021/6/172.023 Community Proposal Voting
Similarly, we have three charts to show the trend of the new Binance coin in the week before its launch. The first one is the scatter chart, containing 167 coins.
The second chart shows the trend, and after removing the 15 coins mentioned above, 152 remain.
Intercepting the last hour, the distribution is slightly to the right, with a median of 1.051 (up 5.1%) and an average of 1.056 (up 5.6%). If the 15 coins are included, the average is 1.225.
Similarly, we present the statistics of BTC at the same time as a control.
The median is 1.003 (up 0.3%) and the average is 1.009 (up 0.9%), with no significant right-handed distribution.
To sum up
In summary, we compared the trend of new coins on Binance and Coinbase in the week leading up to launch and came to the following conclusions.
Binance and Coinbase's new coins generally outperformed BTC in the week before the launch, with BTC's average increase in each time period almost equal to zero, suggesting that the news of the launch was reflected in the price of the coin in advance to some extent. In terms of outliers, Coinbase had 18 coins that rose by more than 1x, accounting for about 15.3%, with a maximum increase of about 6.6x in 7 days; Binance had 15 coins, accounting for about 9%, with a maximum increase of about 10.3x in 7 days. times.
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