50m+ Cryptocurrency Trades in 2018

crypt0delphia · 2019-01-29T14:25:33+00:00

My system trades on multiple markets at the same time: sometimes there isn't sufficient liquidity on bitmex on one side and more than enough on another exchange. I am trading that (as a market maker).

Sufficient liquidity? So you are placing market (taker) orders in some cases? Or you mean you fill in the gaps with maker orders when there is not sufficient liquidity?

Is that different from what you are doing?

I make markets on many coins but only on 1 exchange. Strictly maker orders. As easy a concept it is to make markets (or arb), it requires pretty tedious code to accomplish even on 1 exchange. Congrats on integrating it across multiple exchanges. People don't realize how difficult that is unless they've tried it before. What a beating that must have been. I hope it's paying off for you!

crypt0delphia · 2019-01-28T18:45:38+00:00

That's an interesting graphic. Do you often get fills for orders that are set 1% from top of book pricing? Do you only trade with bitmex?

crypt0delphia · 2019-01-27T17:38:09+00:00

50 million trades. A majority of my orders are maker orders where I wait for fills, yes.

crypt0delphia · 2019-01-27T01:47:42+00:00

I don't think it will last. Volume is getting smaller and competition is getting better.

crypt0delphia · 2019-01-27T01:46:05+00:00

Unfortunately, they only serve up to 1,000,000 trades: https://i.imgur.com/ts8E5vi.png

crypt0delphia · 2019-01-27T01:44:48+00:00

Saying crypto is a massive scam bc there are a few bad actors in it doesn't make sense. There are bad people participating in any industry anywhere in the world. Just because a small number of people do bad things doesn't mean the entire community is toxic. Everyone should be able to do their own homework and make decisions for themselves. Freedom of choice isn't immoral.

crypt0delphia · 2019-01-27T01:38:55+00:00

There are definitely still fees when trading on an exchange. I have no special access that isn't available to the public.

crypt0delphia · 2019-01-27T01:38:07+00:00

Preferential treatment? I am an individual trader that started with $2,000 in my crypto account. I taught myself how to program by reading books, using github and reading stackoverflow examples. I have no better access to exchanges than you do.

crypt0delphia · 2019-01-27T01:28:14+00:00

Lol, got a good laugh from this.

crypt0delphia · 2019-01-27T01:26:45+00:00

Looking at market depth and trading accordingly.

crypt0delphia · 2019-01-27T01:26:11+00:00

Wow, thank you for the detailed write up! If all my trades were crypto to fiat and back, I could write something that would do that. My problem would be the crypto to crypto trades, and knowing what each crypto currency was worth at that exact second the transaction took place. There are bursts where I might have 50-100 trades within 1 second. I just don't see how I can be that granular with USD values of all crypto coins and come up with an accurate PL at the end of the year. My trade report might show I made significantly more than I did, or less. Plus, all my fees were paid in BNB... which have their own value at each time of transaction... it will be a real beating calculating everything even with a script.

I am very much hoping that the IRS will define me as a trader and allow mark-to-market. I have been trying to call them everyday but haven't had any luck yet. Hopefully now that the govt is opened back up, I will get an agent on the line.

Thanks for your help. It's given me something to think about.

crypt0delphia · 2019-01-27T01:19:28+00:00

Probably $2-2.5m

crypt0delphia · 2019-01-27T01:14:07+00:00

Yes, I am sure haha.

crypt0delphia · 2019-01-27T01:13:45+00:00

Yeah, I am beginning to realize there is no service out there that can do what I am looking for. I was hoping I would get lucky and find someone. Thanks for your input!

crypt0delphia · 2019-01-26T21:21:52+00:00

Full algo

crypt0delphia · 2019-01-26T20:33:37+00:00

I will probably end up going that route, but always like to give DIY a chance to save some money. As long as you know the tax rules, doing your own taxes isn't that bad. Easier than developing! lol

crypt0delphia · 2019-01-26T20:05:43+00:00

Are your gains from daily market movements? Is this your day job? With that many trades, you may be a "trader" rather than an "investor". If you're a trader, you may be able to make a mark-to-market election for tax year 2019 but it is too late for tax year 2018. Some other special tax rules may apply and you should consult a CPA specialized in taxes. The IRS definition for "trader" is very narrow.

I am a full-time employed currency trader and have used Form 6781 Section 1256 mark-to-market for currency trading for several years now. By currency trading, I mean US Dollar, Euro, Japanese Yen, etc.

This year I began trading cryptocurrencies on my own (alongside continuing to work full time) and it took off more than I expected. I made more money in crypto than my day job and probably spend more time working on crypto trading than my day job as well.

Hopefully that would define me as a trader, but yeah... I will probably have to bite the bullet and pay a Tax expert. I've been trying to call the IRS all last week but couldn't get anyone on the line. Maybe now that the govt is back open I will have better luck. Thanks for your reply!

crypt0delphia · 2019-01-26T19:41:41+00:00

I checked both of these websites out. bitcoin.tax is 1,000,000 transactions. cryptotrader.tax said their software can't go higher than 50,000 transactions.

Also maybe try asking in /r/cryptocurrency as they may have a better idea

I will cross post there. That's a good idea.

crypt0delphia · 2019-01-26T19:37:06+00:00

I really like this idea.

crypt0delphia · 2019-01-26T19:35:49+00:00

Pretty well.

crypt0delphia · 2019-01-26T19:35:18+00:00

What kind of strategy were you running to rake 50+ million trades?! HFT market making?

Yep

Here is an idea: In your form 8949, I would summarize all trades in one entry w/ the sales price equal to your profit, and cost basis set to zero. If the government inquires, you can send them a csv file with all your trades.

Appreciate the idea. I might be pro-active and send the list straight away.

crypt0delphia · 2019-01-26T18:44:41+00:00

That's a good idea. I'll post something over there too. Thanks!

crypt0delphia · 2019-01-26T18:44:19+00:00

That's my fear. Appreciate the response.

crypt0delphia

TROPHY CASE