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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.
You lost the money the moment you gave it to someone for cryptocurrencies.
NEWSFLASH: "A fool and his money..."
> At what point does one realize that he's holding the digital equivalent of Monopoly money?
Probably not until there's nobody left who is willing to buy it off them for real money.
=Smidge=
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
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 Clinton (Bill) repealed a bunch of laws meant to prevent Mainstreet and Wallstreet banks from intermingling.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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Yeah! If those old ladies didn't wanna be mugged, what were they doing in the park?
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.
Voluntary exchanges and park muggings are totally the same. The people who made these trades were not coerced and if they value crypto currencies improperly that is their own fault. Would you feel any remorse for them over this or any other investment that turned out a loss through natural shifts in the market?
If people are buying into crypto currencies as a long term investment, this small dip should matter little in the long run. If these people were trying to make short term flips to make money, they are not so different from the people who scammed them. In your analogy they are just other muggers in the park who were themselves mugged.
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.
Would you consider fraud to be just another voluntary exchange? Because pump and dump is a form of fraud.