Altcoins

Exclusive Interview with Q a Cryptocurrency Bot-maker

Grzegorz Korycki is a software developer with a niche skill set that has seen increasing demand over the last few years, and with very good reason – he can design and program cryptocurrency trading bots to do his bidding.

Korycki founded Tradecraft, a site where users can rent the services of his bot which has already earned over 50 BTC for clients in under two years through smart trading.

He spoke with CryptoIsComing and told us a little more about himself, his work, and the nature of his trading bot.

 What is your professional background?

I was a hobbyist programmer since I was 7 years old. I started to do it professionally 5 years ago when I was 30 years old. Before I created any bots, I was working for free for over half a year with a forex trader – he had some ideas about bots and I helped create him one. After that, I created my first commercial bot, called “Grid Harvester” for the Forex market

 What led you to decide to create a trading bot?

I realized the unsustainability of the debt-based fiat currency model and the hidden inflation it is subjecting us all to – it was then that I decided to explore trading. When I stumbled on crypto in 2013 it seemed like a perfect solution for the problems our system has.

By 2016 I still hadn’t created my first bot for crypto – I needed to gain some experience. I tried reaching some higher-profile crypto traders in 2014 in the hopes of working together on such a bot, but this didn’t work out. The truth is for every bot idea that works there are 50 different bot ideas that don’t work.

Before I created bots that were successful I tested many different unsuccessful bots. Ideas for the crypto bot were taken from my other bot for forex market. Creating bots for cryptos is easier in a sense than for the forex market, as in Forex you compete with algorithmic trading from the banks that pay hundreds of thousands if not millions of dollars for their algorithms and have ultra-fast servers. It is hard to compete there.

On the other hand, the infrastructure is much weaker in crypto world – we don’t have any trading platform that could be compared with for example MetaTrader, that was designed for the forex market.

 What can you tell us about the bot?

The bot trades bitcoin vs altcoin pairs and focuses on the aspects on trading that manual traders can’t execute. It’s more of a scavenger, because profits from a single transaction are usually very small and the mathematics leading to executing them are complex – therefore they are not attractive for manual traders – the risk/reward ratio doesn’t apply. That fact greatly diminishes the competition that could impact potential profitability.

Who would benefit from the use of your bot, and to whom is it commercially available?

So far it made about 50 BTC for its’ clients during 1,5 year period. Normally the bot is only available to members of one of the trading groups. New clients are only obtained by referral system of existing customers.

As a promotion, we made 10 slots exclusively available for users of cryptoiscoming.com.

Please send your email to thepaw@tradecraft.pl writing “cryptoiscoming” in the topic with a resume, the amount of bitcoin you want to invest, describing your experience in cryptocurrencies, when did you first started trading them and other proof that you are an experienced traders.

Not all applications will be accepted, but if there are more good applicants than free slots you will be added to a waitlist. Applications will be accepted until 01.11.2018. Be aware that we are during a bear trend now, so the profits may not be impressive or we may even have some losses, depending on settings.

How much of the crypto market’s trading volume do you think is comprised of bot trading? Is there a way to measure this?

I haven’t thought about that much – as with every market, the older and more sophisticated the markets get, the more trading volume is executed by the bots. Now every single exchange has an API, which makes creating bots much easier and drives trading volumes higher.

What effect does mass bot trading have on the market? Are all of the bots active on the market effective at earning profits?

They add liquidity to the markets and make the books thicker. They can participate in pump and dump schemes, they help in the process called price arbitrage, which makes the same symbols on different exchanges to have similar prices.

There are profitable and unprofitable ones. I bet more of them are profitable, when we are in bull trend, because new money is arriving to the market, than in bear trend when money is leaving. If I had to guess I’d think that the bots’ profitability in the long term follows some form of Pareto distribution.

I have heard that some trading bots are now operating out of their owner’s control, is that possible?

Never heard of that theory, but it is certainly possible. Bot can get out of control due to bad programming, random events or hacks. Sometimes bugs are lurking in the shadows to hit at the least expected moment. This is why it is a good idea to build a strategy back-testing environment to minimize the risk, but it’s impossible to avoid everything.

Over a week ago Bittrex changed how they accept API calls without explanation or warning – the bot was unable to execute any commands and it took a week to sort it out. We may enter the era of out-of-control trading bots, when they will be running as smart contracts, as there is much less room for error in that kind of environment.

What are your plans for the future of the bot? Do you plan other projects?

Now I am working on A history back-tester – next step is to make it available to users of the bot, so they can see how available pre-sets are performing in the past.

I have few projects waiting in line, but I still haven’t decided, which I will go with. One of it is an environment to create your own trading bots with the possibility of testing those bots on historical data.

I have few other projects in store, but I’d prefer not to disclose the details, due to the nature of the business. What I can say is that all my future project plans are connected to crypto-currencies in genres like trading, programming and gaming.

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The Psychology of Bull and Bear Markets

For all the talk of adoption, new partnerships, government-issued cryptocurrencies, and ever-increasing mainstream media coverage of the cryptospace, the market is really an emotional beast that can tank at a moments notice.

I’m not saying that to put anyone off – it has historically always rebounded bigger and better than ever, but corrections are hard, fast, and unpredictable. Often a bear market creeps up unrelated to the technical side of things, and like a snowball rolling down a mountain, it can start to build in size and speed until something truly enormous is taking place.

Today the market lost $16 billion in value.

Boom, gone. Arguably this was due to Japan’s FSA issuing six exchanges with business improvement orders resulting in bitFlyer temporarily halting the acceptance of new customers and reviewing current customer ID as part of their new anti-money laundering measures. That alone could easily spook the market and put off the many libertarian investors to whom Bitcoin and cryptocurrency is a way of distancing themselves from the government and taking control of their own finances.

Also people who are, you know… laundering money.

If the FSA’s measures were indeed behind the most recent decline, however, it was likely one of many relatively minor factors that ends up triggering a major event such as that seen today.

Traders can scour the news, read over the charts, and toss the chicken bones and examine the tea leaves, but at the end of the day things don’t always go according to plan.

There are, however, certain common psychological phenomena that commonly occur in any marketplace, and crypto is no different.

Enthusiasm, Greed, Denial, Fear, Capitulation

Sounds kind of scary. These are actually trends seen in the rise and fall of a typical price bubble – however, with Bitcoin and the cryptomarket as a whole, we’ve already repeated this phase several times.

Damn, son.

Greg Schoen sold 1,700 BTC in 2011 only to see the price skyrocket from $0.30 to $8.00. Then to $80, $800, $8,000 – even in this current bear market with BTC at $6,000 as I write, those BTC are worth over $10 million. Gregg was around for many Bitcoin bubbles – according to the ‘Bitcoin Obituaries’ website, Bitcoin has been pronounced dead in the media over 300 times and counting, each time suddenly resurging once again. With each wave of volatility came waves of emotions, pretty much in the same order.

Enthusiasm: Hey, this Bitcoin stuff seems pretty cool. You know, I think it’s actually kinda going somewhere! I don’t know too much about it, but I’m gonna buy in and see where it goes.

Greed: Man, have you seen the Bitcoin charts? This shit is crazy, if I get in now I can retire when I’m 12 and live in a tower made of Lamborghinis stacked as high as the god damn moon!

Delusion: This is it. That $472 I put into Bitcoin is going to make me among the richest beings in the multiverse. When I talk, people will bottle the air around my head and sell it on eBay to feed their children. 1 Satoshi is going to be the new $1 million, and I will be so rich that I literally cannot die.

Denial: Alright, things are taking a bit of a downward turn. You think I’m gonna cash out now? Are you high? Did you not hear that thing I said about my bottled breath being more than you could make in a year, you idiot? It’s just consolidating, don’t stress me out like that.

Fear: OK what the hell. What the hell is this. Do I bail? This is still more than I ever thought it was going to be worth when I got in, but that was then. I’m HODLing this shit until you pry my digital assets from my cold, dead, cryptographically encrypted fingers.

Capitulation: It’s over. I surrender – no lambo tower to the moon, no godlike immortality – this Bitcoin stuff is stupid, and I hate it, and I hate you, and I’m selling my laptop and moving to Alaska to chop trees and drink myself to death.

The Cycle Continues

Here’s the thing about bubbles – they burst, they reform, the cycle continues. No-one can predict when an asset’s value is really “dead” or whether it’s just resting its eyes – the bubble cycle we listed earlier is a variation of a commonly recognized Wall Street cycle in the emotional journey of investors. This can happen on a macrocosmic level as seen in the 2017/18 boom and bust of the crypto market which brought it into the mainstream media at last, but it happens on a much more frequent and minuscule level with market assets all the time as well, even on a day-to-day basis.

People looking to trade cryptocurrencies would certainly do well to learn technical analysis, which in particular is relevant for day-trading – however, it’s important to consider TA in the context of market emotions as well.

In hindsight, investing at the ATH of Bitcoin in 2017 was not a smart move (pfft, not that I would know anything about that), but it’s only when considering the market in terms of the above psychological cycle that such a thing is crystal clear.

Bull markets sweep people off their feet with the infectious greed and/or excitement of making a lot of money, while bear markets pose opportunities as well for those who think they can time the market and read the writing on the wall. In a bear market, there’s the constant risk of catching the falling knife and cutting your hand open (i.e., thinking you’ve bought in at the bottom only for things to, you know…)

Yeah.
At the end of the day, bull.bear market psychology is really interesting stuff that gives us insights not only into the markets but into ourselves as a society. A society of reactionary, greedy, easily terrified, hysteric lunatics. That’s deep.

On Wall Street, the VIX is an actual fear gauge used by traders to literally measure market fear and volatility, and a prominent Wall Street investor recently said that Bitcoin was actually predicting the movement in the VIX charts, an earlier measurement of market fear than the VIX itself.

Anyone interested in learning TA to try their hand at day trading can check out resources like The Chart Guys to get neck deep into trading charts and price indicators, but always remember – the thing that will affect the price more than any other factor is human emotion. Those red and green candles are a brain scan of the collective consciousness of the market as a whole, and you need to be just as good at recognizing the emotions of others as you are at being logical with your own if you want to take part.

Interested in a cool crypto story….check out TOTAL DOMINANCE: The Story of Binance and The Top Secret Hedge Fund That Everyone Knows About.

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How much do Crypto Exchanges make in revenue *every single day? Graphic

Great graphic from Howmuch.net showing the top crypto exchanges in terms of revenue.

Talk about printing money. Forget shitcoin trading, investing in an exchange was the best move to make during this cryptocurrency craze. Binance, only one year after its launch, is generating $3.5 million in revenue…PER DAY!!! Not sure you could even print money that fast. Coming in second is Korean exchange UPbit with $3.42 million per day. Rounding out the top 5 are Huobi, Bittrex (yup, even with all the declining volume) and Bithumb. And last but not least, Poloniex with $0.07 million per day. Things sure do change fast in the cryptosphere. A year ago Poloniex was top dog, dominating altcoin trading, and not 12 months later has fallen 20 spots.

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Crypto Exchanges – Where to buy bitcoin

Where can I buy and trade bitcoin?

With so much news about bitcoin and cryptocurrencies lately, a lot of you may be asking yourselves “where can I buy bitcoin?” and trade this new digital asset class. This may vary depending on where you are located and what coins you want to buy. In this post I’m going to provide an overview on the largest crypto exchanges and compare and contrast them so you can decide which is the best fit for you.

One final piece of advice from us here at Crypto is Coming: Be sure to use google authenticator for 2 factor authentication as an added layer of security when using ANY of these platform. If you buy bitcoin through one of these companies, make sure to go to our wallets guide to find out the best  way to store your bitcoin safely.

ExchangeReputationSupported
Countries
Ease
of Use
Available
Currency
Payment
Methods
Visit Site
Kriptomat IOStill New/Good so farEuropeVery EasyBTc, ETH, LTC, DASH, REP, +12 moreBank Transfer, Credit Card, Visit Kriptomat
Coinbase exchangeVery GoodUS +32
countries
Very EasyBTC, ETH, LTC
(More coins
coming 2018)
Bank transfer, credit card, Visit Coinbase
Bitfinex exchangeAverageNon US OnlyAdvancedBTC, XRP, ETH,
LTC,+60 more
CryptocurrencyVisit Bitfinex
Kraken ExchangeVery GoodWorldwideEasyBTC, XRP, ETH,
XLM,+40 more
Bank transfer, CryptocurrencyVisit Kraken
Bittrex exchange Very GoodWorldwideAdvancedNEO, ETH, LTC,
XRP,+100s more
CryptocurrencyVisit Bittrex
Binance exchangeVery GoodWorldwideAdvancedZEC, ETH, LINK,
XLM,+100s more
CryptocurrencyVisit Binance
Ploniex exchangeAverageWorldwideAdvancedXRP, LTC, XMR,
OMG,+100s more
CryptocurrencyVisit Ploniex
CEX.IO Very GoodWorldwideVery EasyBTC, ETH, BCH
DASH, ZEC,
+15 more
Credit card and bank transfersVisit Cex.io
GoodWorldwideVery EasyBTCBank transfer, credit card or bitcoinVisit Xapo
Bitmex GoodWorldwideExpertBTCCryptocurrencyVisit Bitmex
GoodWorldwideEasyBTC, ETH, NEO, LTC, BCH, +100s moreCryptocurrencyVisit Bitmex

Kriptomat

Kriptomat is a crypto-trading and e-wallet service officially licensed to operate within the EU. The exchange now offers 17 crypto-to-fiat pairs, a welcome feature for those who don’t wish to go through Bitcoin as a “middleman” currency in order to trade cryptocurrencies. With service and support in over 20 languages, the exchange is suitable for users from all over Europe. The cryptocurrencies currently on offer are Bitcoin, Ethereum, Litecoin, Augur, Gnosis, 0x, OmiseGO, Enjin, Status, SunContract, Metal, Civic, Request Network, FunFair, PropyDash, Litecoin and Loopring. For more details check out Kriptomat review here.

Coinbase (Gdax)

Based in San Francisco, California, Coinbase is the largest cryptocurrency exchange in the United States in terms of users. Backed by silicon valley VC, and with a valuation of $1.6 billion, Coinbase has become the go-to platform for new customers looking to buy Bitcoin for the very first time. Recently they’ve added as many as 100k users per day. Coinbase offers a easy use platform for buying and selling Bitcoin, Ethereum or Litecoin via bank deposit or credit/debit card (with associated fees). Among exchanges Gdax offers real time trading (and lower fees). Interface is one of the best, but it has been known to go offline in times of extremely high volume, so take that into consideration when using the platform.

While Coinbase is currently limited in terms of the currencies that it has listed, the company has vowed to add more coins in the coming year. Support tickets may take a while to receive a response depending on the urgency as they are growing faster than they anticipated. Visit Coinbase

Bitfinex

Based in the United States, Bitfinex is the largest crypto currency exchange in the world in terms of volume. Bitfnex offers trading for Bitcoin, as well as many of the largest and most well know alt-coins. Along with traditional spot trading, they also have margin trading, allowing users to trade with more capital than what they have in their account. The interface is one of the best in the industry although not exactly beginner friendly. Bitfnex allows crypto deposits for coins they support as well as wire transfers over a certain amount. They’ve recently come into question regarding their use of Tethers (USDT), a token backed by USD which facilitates that deposits on the platform, and have mentioned that a formal audit is on the way. Make sure to monitor this story in the coming weeks and months as it should shed light on the internal processes of the company. Visit Bitfinex

Kraken

Based in San Francisco, California, Kraken is the largest Bitcoin exchange in terms of euro volume and liquidity. The exchange also has trading for Bitcoin in Canadian dollars, US dollars, British pounds and Japanese yen making it a great option for users wanting to buy bitcoin internationally. Kraken was the first Bitcoin exchange to have trading price and volume displayed on the Bloomberg Terminal. It was also first to pass a cryptographically verifiable proof-of-reserves audit. The platforms supports BTC as well as many large and mid market cap alt-coins. Kraken also allows margin trading and deposits via bank wire or BTC and other cryptos. The interface is possibly the worst among the large exchanges with a trading engine that constantly freezes and requires users to refresh the page. Take this into consideration when trading on this platform. Visit Kraken

Bittrex

Based in the United States, Bittrex is the 2nd largest alt-coin exchange in the world in terms of volume (just recently surpassed by Binance). It has hundreds of currencies and tokens available for trading and has become the most trusted alt-coin exchange by crypto traders in 2017. Bittrex supports crypto deposits for any currency they have listed and have said they will integrate margin trading soon. Bittrex support is generally more responsive than other sites, but still not up to most users’s expectations. The interface is very good, minimalistic, easy to use and has a pretty good trading engine. Although the site has recently experienced some loading issues with the extreme growth the crypto space is experiencing, this has not affected them too much. Visit Bittrex

Binance

Based in China, Binance is a new and up and coming crypto exchange that has recently gained popularity and acceptance among the crypto trading community and actually surpassed Bittrex as the #1 alt-coin exchange in terms of volume. They allow cryptocurrency deposits for any coin or token they have listed and have one of the fastest and most reliable trading engines on the market along with lower fees than their competition. The interface is very good, easy to use and rarely has any lag when loading pages. The support is somewhat lacking compared to other exchanges so it might take a while longer for users to enhance their verifcation on the site for increased withdrawal limits. Binance is currently the number 2 alt coin exchange in terms of volume behind only Bittrex. Visit Binance

Poloniex

A US exchanged based out Delaware, Poloniex was the top alt-coin exchange in the world as recently as March, 2017. They offer alt-coin trading, crypto deposits and have a large variety of currencies and tokens listed on their platform. You cannot buy bitcoin with USD on Poloniex. The interface is pretty good, on par with some of the other sites, but they started having customer support and site connectivity issues earlier this year, prompting the two companies listed above to surpass them in terms of volume and community acceptance. Some of the concerns with Poloniex include withdrawal issues and the trading engine freezing in key moments causing users to lose some trust in the company.Visit Poloniex

XAPO

Xapo is incorporated in Hong Kong , has an office in Palo Alto, California and operates Worldwide. They provide both wallet and exchange services for Bitcoin with USD deposits through bank wire, credit/debit cards, some payment processors as well as BTC deposits.  They have a BTC debit card service and a great mobile app for android and iOS. Xapo places emphasis on security and  actually use a bunker in the swiss alps for storing private keys. Their online interface is simple and easy to use. A great place for new users to buy Bitcoin as well as one of the better online wallets to store Bitcoin. Visit Xapo

Kriptomat 

Kriptomat is a crypto-trading and e-wallet service officially licensed to operate within the EU. The exchange now offers 17 crypto-to-fiat pairs, a welcome feature for those who don’t wish to go through Bitcoin as a “middleman” currency in order to trade cryptocurrencies. With service and support in over 20 languages, the exchange is suitable for users from all over Europe.

The cryptocurrencies currently on offer are Bitcoin, Ethereum, Litecoin, Augur, Gnosis, 0x, OmiseGO, Enjin, Status, SunContract, Metal, Civic, Request Network, FunFair, PropyDash, Litecoin and Loopring. These currencies can all be traded against the Euro and the exchange is open to all 508 million inhabitants of the EU.

CEX.IO

Based out of London, CEX.IO offer exchange services for Bitcoin and Ethereum for users from most countries around the world. Currently they allow deposits via bank transfer and credit/debit cards and are registered with FinCEN which may give users an added sense of security. Their interface is beginner friendly but they do not have many different cryptocurrencies to choose from. CEX.IO may serve as an on-boarding platform from fiat currencies to BTC or ETH where users can initially enter crypto and then transfer over to other exchanges for a wider variety of alt-coins. Customer support is usually fast and done via email as well as extensive FAQ. Fees for the exchange are about industry average. Recommended for new users wanting to buy bitcoin internationally. Visit CEX.IO

Bitmex

Based in Hong-Kong, Bitmex is a real-time, cryptocurrency derivatives trading platform for professional investors. It provides currency futures trading, stock derivatives, and other financial products. Bitmex allows users to deposit in Bitcoin and trade Bitcoin and other large market cap alt-coins with the additional feature of futures trading (speculating on the future value of these assets). It operates in China, Europe, South Korea, and Japan as well as other selected non US countries. The site has a really good but not beginner friendly interface and a great trading engine, but lacks the liquidity when it comes to alt-coins. The advanced functionality of the platform, including futures trading, might scare off some users not accustomed to these types of markets.  Visit Bitmex

Kucoin

Based out of Hong Kong and trying to be the hottest cryptocurrency exchange by 2019 Kucoin is the latest hot exchange. Kucoin offers a great user interface and experience, good security through 2FA integration to trading, low trading fees and incentives for trading and holding the native coin Kucoin Share (KCS). You cannot send fiat to Kucoin so to start trading you must deposit one of the following: BTC, ETH, NEO, USDT, or BCH.

Kucoin is available to users worldwide and offers a load of trading pairs such as LTC/BTC, BTC/DASH, BTC/NEO, BTC/ETH, BTC/KCS, BTC/RPX, etc. As of this article Kucoin has a 24 hour volume of 75 million USD and is ranked 25th amongst other exchanges. Visit KUCOIN

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