Altcoins Crime Crypto Price Analysis Cryptocurrency

Crypto Price Manipulators Have Made 825 million so Far This Year According to The WSJ

Organized trading groups are largely responsible for price manipulation using services such as Telegram according to a wall street journal report from August the 5th. According to research results from the wall street journal, “pump and dump schemes” had succeeded in making a lot of money off of unsuspecting investors through inflating and crashing of various cryptocurrencies this year. This has led to these groups generating hundreds of millions of dollars in revenue while the rest of the investors are left bleeding money when the trade groups sell off a particular asset in mass.  According to the wall street journal report, the trade groups made a killing in the first 6 months of 2018 alone, scoring revenues of about 825 million.

This kind of price manipulation, fraud and crime dogs the crypto market and is one of the reasons why the Bitcoin ETF approval is hanging by a thread. These pump and dump groups keep retail crypto investors on edge on which tokens to put money in. most investors, however, have no idea that the scheme is just a trap to draw them in when prices start being manipulated upwards and leave them high and dry when they precipitate a market crash. A classic market pump and dump begins this way, the top guns select a low market cap cryptocurrency on a lesser-known exchange in order to have greater control over the volume and price movements of the cryptocurrency. They will then alert their paid members that a pump is about to start, these members will then start pumping cash into the coin causing a rise in price.

Free members who typically react when market movements begin to rise otherwise known as “market chasers” begin to stack up on the coin as well for fear of missing out “FOMO”. The top guns will then begin selling their holdings of the coin at high profits before announcing the dump phase to other members. Free members get caught by the downward swing leading to them incurring losses or may sometimes get smaller profits depending on the time they started dumping the coin. The Wall Street Journal did an analysis of 175 trading schemes that pulled pumps on 121 different coins. The report further stated that many more such groups exist and operate in private chat rooms that are only accessible via invitation and overseen by an anonymous moderator.

The report mentioned Altcoins such as Cloak coin which experienced several pumps in 2018. Another pump occurred in Binance sponsored a trade group known as Big pump signal. This report adds onto speculation of price manipulations that have dogged crypto in recent months.

Author: Kelvin

I am a crypto enthusiast based in Nairobi Kenya, who loves investing, research writing, reading, fitness, African food, and soccer.

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I am a crypto enthusiast based in Nairobi Kenya, who loves investing, research writing, reading, fitness, African food, and soccer.
I am a crypto enthusiast based in Nairobi Kenya, who loves investing, research writing, reading, fitness, African food, and soccer.

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