Who and How Influences the Cryptocurrency Market?

What Controls the Cryptocurrency Market?

The capitalization and exchange rate of BTC at the end of 2017 increased sharply, and the total value of the market tripled. Against the backdrop of these events, some experts hinted that the numbers on CoinMarketCap do not quite correspond to reality, and in some cases, are artificially inflated at times. How is it done?

A company registered somewhere in Curacao is issuing another altcoin, with an issue of tens of billions of coins. It is launched on the exchange, and then a certain amount is bought for $1. Instantly, the rate of this worthless digital currency jumps together with its capitalization. And now, from the 600th line in the world ranking, it ends up at 21. Immediately there are advertisements and posts on forums. “It will change the world,” “this is the future of virtual currency.” Such messages appear with enviable regularity in publications that publish news about the blockchain community and cryptocurrency overview.

An example of the described actions is Ripple. The creators have been successfully working with the banking system for a long time, offering bankers convenient software products based on secure transactions via blockchain networks. At the same time, the global giants of the financial business are not at all interested in the internal XPR token. But this had not stopped it from achieving popularity and the rate from a few cents grew to 1.04 dollars in a short period. 37 billion coins at a rate of more than $1 create an obvious imbalance. For comparison, the total supply of bitcoins is 21 million coins.

At the same time, Ripple is a completely centralized system in which users do not have special rights. In fact, many consider its appearance as the response of the financial elite to the crypto revolution. And the fact that they can do it so easily with relatively small budgets makes us worry about the future of this young market. The leaders do not plan to give up their positions.

Soros, Buffett, and other bigwigs in the investment industry regularly speak out about bitcoin in the most extreme form. This is not surprising because everything that they cannot control is a threat to their interests. Therefore, interviews regularly appear in which these people call the first cryptocurrency a “bubble”, promising either a collapse or other problems for holders.

Cunning Schemes

Mathematical manipulations and news stories make the crypto market unpredictable for ordinary traders and investors. While they are terrified of getting rid of assets or, on the contrary, trying to buy cryptocurrency and exchange cryptocurrency on various platforms, including Changelly, the manipulators themselves are multiplying their own capital. So it was with the UdotCash project. A well-designed scheme made it possible to break into the top 30 and sell numerous coins. The same story with Dentcoin which gained 3,600%.

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A “coin X” is issued at 0.00001 US dollars, and a beautiful legend is created with smart ideas about a prosperous democratic future without government control. The crowd buys this altcoin in decent volumes, the rate rises sharply. Having stuffed their pockets and exchanged digital assets, developers go into the sunset, leaving crypto investors with nothing.

But there are new ways. For instance, a fake letter was sent from a hacked account of the National Bank of China to the owners of Hong Kong crypto exchanges. In it, they were invited to a meeting during which the state regulation would be discussed.

Rinse and Repeat Cycle

A major market player begins to sell a large amount of digital money at a price lower than the market one. This causes panic, the cost drops sharply, after which the initiator buys assets at the most favorable rate and, as a result, remains in the black, then the cycle may repeat.

Insider Trading

Not only small companies but also giants like Coinbase do not disdain this. They conducted an internal investigation, culminating in lawsuits against their own employees. They managed to earn on BCH. The situation is developing similarly in South Korea, where local officials can be judged on the same suspicions.

What Happens?

Large holders with each fall increase the amount of funds in their wallets. Therefore, everything that happens in the crypto market is a process regulated from the outside. It is impossible to find out the owners of these crypto wallets. But it is obvious that the whales are acting together, influencing the course movements with artificial dumps.

Indeed, the further the blockchain industry develops, the larger and more transparent it becomes, and the less room will be left for manipulation and various conspiracy theories. In just 10 years, the industry has made a huge step in development, so the future is already close.

(Devdiscourse’s journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)