This is to warn all of you about danger of trading when a specific coin is only traded on one exchange.
I find Bread (BRD) project awesome. I see great potential in creating a safe, anonymous and easy to use wallet with crypto purchase option that will bring crypto closer to everyday use (maybe even take a small chunk of the market controlled by Coinbase).
Although I am not sure, if the BRD token will help users to specific advantages (e.g. users who will use the wallet will have a list of perks) or if the token will help to reduce some fees (like Binance does with BNB), I can see a use for it. I do NOT consider BRD to be a shit coin or BRD project to be a scam.
But this is description of my experience after observing trading of BRD tokens for two days on Binance.
Binance made an announcement regarding BRD token and I decided to buy it.
https://support.binance.com/hc/en-us/articles/115003644872-Binance-Distributes-and-Lists-Bread-BRD-
Keep in mind that that this is not a coin with a very low volume (it has a daily volume between 2400 and 2600 BTC - more than ADA, BNB, STORJ, SUB, POWR, LISK etc.).
But after purchasing the coin, I noticed some weird trade practices on Binance (I didn't pay any attention to them before buying). Huge orders were continuously set in place to buy and sell the BRD token, but they were always cancelled before they were executed. This was continuous action and the price went up and down for hours. It caused the price to move between 0.00012000 BTC and 0.00017000 BTC (peak was 0.00017500 BTC). This was so weird that I tried to research it a bit and I found chat groups on https://boards.4chan.org.
Two chats ( https://boards.4chan.org/biz/thread/5444115 and http://boards.4chan.org/biz/thread/5446213/i-fucking-told-you-stupid-4chan-sluts-last-night ) describe what will happen to the price and it did (many times). Now maybe they were just lucky guesses or some highly skilled traders saw the market reactions in advance. But from where I am standing, it looks like certain individuals decided to control the price. Of course it is impossible for us to know the relationship of traders spoofing and traders buying/selling (many trades were made). Maybe they were the same person, maybe they were part of a group, and maybe they are not connected at all.
But one thinks of what is happening, if ASK and BID walls show strange behavior without trades being executed. For example: somebody made a huge offer for sale of BRD at aprx. 0.00017000 BTC and then again the same amount in a very short period at aprx. 0.00012500 BTC and then again at aprx. 0.00015000 BTC and at aprx. 0.00016000 BTC, with all orders cancelled. And the same actions were replicated on the purchase side. This went on for several hours.
Since this coin is only traded on Binance there was no other price I could relate to. I bought this token to hold, but I can imagine that people who only try to trade it, can lose their money very fast. But given what I saw in regards to the price action with BRD token within this two days, I decided two things:
- I will always check the market for spoofing before buying
- I will never again invest in a coin that is traded on only one exchange.
I feel it is quite easy for individuals or groups with larger portfolio to influence the price (even on a large exchange like Binance) and you can never tell if you bought the market price or pumped/dumped price.
I hope this helps anyone with decision of purchasing BRD or any other token listed on one exchange or on some smaller exchanges. Before buying please observe the market and if you see any evidence of spoofing, be very very very careful.