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Traders Are Talking Up Cryptocurrencies, Then Dumping Them, Costing Others Millions (wsj.com)
Dozens of trading groups are manipulating the price of cryptocurrencies on some of the largest online exchanges, generating at least $825 million in trading activity over the past six months -- and hundreds of millions in losses for those caught on the wrong side, according to a Wall Street Journal analysis. From a report: In a review of trading data and online communications among traders between January and the end of July, the Journal identified 175 "pump and dump" schemes involving 121 different digital coins, which show a sudden rise in price and an equally sudden fall minutes later.
A pump-and-dump scheme is one of the oldest types of market fraud: Traders talk up the price of an asset before dumping it for a profit and leaving fooled investors with shrunken shares. The Securities and Exchange Commission regularly brings civil cases alleging pump and dumps using publicly traded stocks. Manipulations of cryptocurrencies are no different, but regulators have yet to bring a case in the more opaque market for them. The SEC declined to comment.
A pump-and-dump scheme is one of the oldest types of market fraud: Traders talk up the price of an asset before dumping it for a profit and leaving fooled investors with shrunken shares. The Securities and Exchange Commission regularly brings civil cases alleging pump and dumps using publicly traded stocks. Manipulations of cryptocurrencies are no different, but regulators have yet to bring a case in the more opaque market for them. The SEC declined to comment.
Yep, you got it.
That's how the market works in a capitalist system, comrade.
How is this need? It's always been the business plan for all cryptocurrencies
Same pattern that's going on with trading stocks. It's no longer for the long term growth and growing companies.
You lost the money the moment you gave it to someone for cryptocurrencies.
Not to be overly harsh, but...
Who could have possibly anticipated that a virtual "monetary system", which has absolutely no controls or laws governing it, by design, could be manipulated in the simplest way possible, just so someone could make a few million dollars?
I guess the same incredibly naive people who come up with it in the first place, and also, thought that there was absolutely nothing wrong or fishy when valuation increases by thousands of percent *with no actual value being created*. Has absolutely everyone forgotten the years 1999-2002? That's rhetorical, of course.
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You can't bullshit the bullshitter.
NEWSFLASH: "A fool and his money..."
It's very well known that thinly traded or illiquid assets are especially vulnerable to market manipulation. There's a reason why stock market pump-and-dumps mostly happen in "penny" stocks.
This is not an argument for or against cryptocurrencies. It's something that can happen in any market.
Yes, all of it. That's its entire point.
Congratulations!
The stupid and the rejects were having a toy. And they cry for years that nobody is playing with them. Now the big boys are here. And they are doing things the way big boys do things: without nanny and geek talk about the history and beautiful concepts. And the geeks can't even follow even with the years of advance in the new tech.
Because two guys got the Nobel prize for proving that this is not only a guaranteed effect of a stock market, but that crashes are actually essential to keeping it healthy!
Because crashes are nothing else than the fools realizing that their stock ain't worth shit because the imaginary worth went so high that it stopped being believable.
If you prevent that, the result is like putting a plug on a volcano. It enables the pressure to rise until the entire mountain explodes.
Example: Financial crisis of 2007.
Now they found even hotter fuel (like cryptocurrencies) and an even bigger plug.
So have fun with the worth of your income, when that explosion happens. It will make a global geological extinction event look like a school schience fair volcano.
Just like any exponential growth an all of the universe, it destroys everything in its path, and you want to be as far away as possible.
Like pathogens, explosions, and humans.
> Dozens of trading groups are manipulating the price of cryptocurrencies on some of the largest online exchanges
Not unlike investment banks, wow. Don't people know what caveat emptor mean anymore?
What is Cryptocurrency actually used for?
Very few people actually use cryptocurrency as a means of making purchases.
From where I sit, the vast majority of people buying cryptocurrencies are speculators. They're buying it now at a particular value in the hope that they can sell it to someone else in the future at a higher value. The cryptocurrency has no inherent value as it's not used for anything else other than speculation. Sooner or later people will wake up to this and the value will plummet. It's like a game of pass the parcel, only you don't want to be the one left holding the parcel when the music stops.
Shoot a few .. shoot a few more. Ah peace returns with a full wallet. That's better ....
Legalized fraud/theft/robbery is the core of the entire problem. Aka: Giving less work for your money than the payer had to work to get it. Or, taking money for your work... nd tehn taking some more, *without* working for it. Aka profit. When the same work should be worth the same.
Oh wait, with banks, stock, or imaginary property, you don't have to work at all!
It's not capitalist. It's not "free market". It's just a crime. Period.
How so? A rigged market manipulated behind the scenes is not "free" in any sense.
This article is light on details and makes all sorts of false and misleading claims. Of course is comes from WSJ.com which is lame stream media interested in pushing Windows for desktops, and see all that liberal politics full of Trump derangement syndrome? This won't fool insightful investors like us who know better and buy bitcoin as often as possible because we know it will be worth BILLIONS very soon as the ecomony takes off and America soars the future. Real truth is that Bitcoin as an investment strategy is %100 SECURE. Many many smart investers say way more secure than gold or any Fiat currentcy. I know this and sites like Slashdot.Org have published countless stories CONFIRMING it. So what are you waiting for? Buy more Bitcoin today!
Just who exactly do you think these "investors" are who are BILKING others? That's right. Bankers, or those in banker adjacent industries.
Regulation exists because an industry has proven themselves UNTRUSTWORTHY.
"Oh my God. This is terrible. This is the end of my Presidency. I'm fucked."; ~ Donald J. Trump
and when pressed they'll admit it's basically gambling that they can get out of the market and leave someone else holding the bag.
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the housing crash was caused by deregulation. Clinton (Bill) repealed a bunch of laws meant to prevent Mainstreet and Wallstreet banks from intermingling. That's how you got Credit Derivative Swaps that let them hide their losses.
Also, most of the houses foreclosed during the crash were investment properties. Besides a few high profile cases touted in the media there wasn't a lot of folks borrowing outside their means for their main domicile. Again, a lack of regulation made this possible as there was no regulatory oversight when people were borrowing for these investment properties. Banks weren't required to check ability to pay much or at all, which further inflated the bubble.
Donald Trump & the Republican lead Congress (with a bit of help from the right wing Dems) have further deregulated the banks and given them license to go back to the kind of lending and over-extending that caused the 2008 crash. On the plus side for Trump & Co he'll likely be out of office by the time the effects take place, just like how the Bush/Clinton deregulation got handed off to Obama to fix.
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Oh yeah, the poor are using their millions to manipulate the market. A real stable genius you are.
So the answer to being fucked over by big players in (under)regulated markets is to switch to being fucked over by big players in unregulated markets.
Not only is this great personal advice, it's ridiculously insightful as to the order of the world, bravo!
you're free to not click buy, and to not be a gullible retard
Welcome to crypto currency trading. Enjoy your stay.
The stupid money loses, smart money wins. This is how efficient markets work. When you have zero interest rate policy (zirp) for so long, you protect the stupid. A bailoout-free blowup weeds out the fat morons believing in unicorns. We need more real market dynamics in so-called regulated markets.
Prestige gambling.
c/o le stock exchange.
This has nothing to do with Bitcoin. All digital Tokens are derived from ethereum smart contracts and most all of them are created to take advantage of the greater fool theory.
Untrustworthy digital tokens are inexcusable in this new era of automated trust when it is possible to programmatically link the token to the performance of the company or some other valuable asset.
Just who exactly do you think these "investors" are who are BILKING others? That's right. Bankers, or those in banker adjacent industries.
Regulation exists because an industry has proven themselves UNTRUSTWORTHY.
You are clearly not an American. If you were American you'd be busy boring us with a long lecture about how something like this would not happen in a completely unregulated market in a society where government and laws have been eradicated.
Forgive me if I am mistaken, but I believe this type of pump up the price system is pretty much the entire bases of how the gold market works, no?
Cry me a virtual river. One group of people stupidly buy that which doesn't even objectively exist, hoping to make money out of nothing, and then whine when they get ripped off.
These people were trying to create wealth out of nothing, evolving from action that really serves no one, helps no one, and accomplishes nothing. Bitcoin speculation is like you gambling on what number I'm thinking of, when you have to tell me what your guess was, before I tell you whether or not you were right, and unsurpisingly, you always lose. You can never prove what number I either was, or wasn't thinking of, and I have an interest (being the person you're betting against,) in picking a different number from the one you state.
If lotteries are taxes on people who are bad at math, then losses from speculating on Bitcoin (and any other so-called "cryptocurrency" or "virtual currency,") are taxes on idiocy. Despite being a relatively new thing, there are old quotes that apply perfectly to this situation, including such classics as "there's a fool born every minute," and "a fool and his money are soon parted..." and probably others but you get the idea.
Or maybe you don't get the idea, because you're the sort of person who is holding Bitcoins. I wish I could help but, besides pointing out the painfully obvious, I don't know how. Bitcoins are a poor investment because you're gambling on something that doesn't really exist.
The really sad part is the amount of environmental damage done by all the waste-heat from all the computers of all the morons trying to, for all intents and purposes, pray their way into wealth, and the amount of e-waste generated on computers that will never be put to any real, constructive purpose, and will likely ultimately end up in scrapheaps leaching toxic compounds into the world around them.
Our reign has gone on long enough. Indeed. Summon the meteors.
Dumbasses Are Buying Up Cryptocurrencies, Costing Themselves Millions.
This seems to be self correcting since they are likely to either run out of money, or learn, or perhaps both.
Shutup, man. Stop trying to talk the market down. Given enough time, they'll bounce back. I'll ride this out and be rich. You'll see. You'll all see!
When they came for the communists, I said "He's next door. Take him away. Goddam commies."
Go hide behind your regulatory regime that seems to be making all the bankers rich ...
Because it's simply impossible for bankers to reap extreme profits in under-regulated financial markets.
I actually build compliance engine for trading systems. I know first hand how 1940 Act is supposed to work and what investment banks do to avoid complying. The problem isn't the old regulations that had a firewall between savings and investment banks. The problem wasn't diversification laws like 1940Act. The problem is that politicians systematically neutered the SEC and stripped them of power. The problem is the ivy league schools worked closely with Wall Street to write a bunch of papers stating "regulations is expensive and anti-competition." As a result, the politicians had the bogus papers for ammunition. They kept chipping away at the regulations starting with Reagan. Bush, Clinton and Bush all deregulated and made things worse. As a result, everyone lost 30-40% from their retirement, pension, 401K. You want it to be fair, vote in regular middle class people instead of millionaires. Vote for term limits. Vote for free air time for all candidates and give the media outlets a tax break for the air time. Reverse citizens united. Ban superpacs. Far too many US voters are apathetic and foolish. You get the government you deserve, not the government you want. The founders of the US understood this basic fact. The government you get is the result of the effort you put into it. If 80% of the voters don't give a shit, the 1% that have the money and power will gladly speak for everyone else with their money.
Step 1: Buy a non-productive asset.
Step 2: Somehow miss the point that the asset is not productive and the any wealth gain one may receive is an equal wealth loss for someone else.
Step 3: Be surprised that sophisticated investors are wiping the floor with your HODL BEFORE I SODL nonsense.
Actually that scheme making the bankers rich and everyone else poor is IDENTICAL to this scheme. Those with market knowledge and the power to manipulate the market will always fuck over the poor and uneducated. All this really shows is cryptocurrencies have the exact same failings as many of the penny stocks but without the regulators watching the pump and dumps as closely.
Why should SEC intervene? After all, cryptocurrencies were created with the idea to avoid interference from SEC and other like it. People wanted freedom of money transactions, let them enjoy that freedom.
And by the way, these "investors" in cryptocurrencies are not investors at all. They're gamblers and adrenaline junkies.
If it's that easy to manipulate the system, then there's something wrong with the system..
His death was faked. You read it here first.
isn't this what traders do? it's just that they now added cryptocurrencies to their playbook.
On a long enough timeline, the survival rate for everyone drops to zero.
And tomorrow the sun will rise at dawn.
This isn't anything new. This is what's been done on Wall St. for decades. Why would anyone be surprised that it's now being done on something else that's traded???
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Y'know, I understand there are criminal laws against pump & dump. You read about them when people talk about penny stocks (and all the freakin' spam we get to pump).
Wonder when someone's going to hit the traders with those charges?
This practice goes way back... see Proverbs 20:14.
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What do you mean, the experts say Bitcoin is now poised to test $8,500....
waaaah???!!!! Bitcoin plummetting to $6.2K today! Oh noes, my kid's college! my retirement!
oh wait, I don't own any of that crap