Cryptocurrency Markets Manipulation: Facts Vs. Fiction
Unveiling the Truth Behind Cryptocurrency Markets
The recent price surges and their corresponding spirals in the cryptocurrency markets have led many to believe that cryptocurrency markets are at best being subtly influenced and at worst outrightly manipulated.
This, of course, is one of the reasons that many have doubted the authenticity of the maturing of the crypto space.
Many assume (and wrongly so) that Bitcoin prices move either up or down at the slight mention of the cryptocurrency in the news.
These and other quirks of the cryptocurrency markets are the reasons behind their supposed manipulation.
Fact: Cryptocurrencies are New Technology
Following Satoshi Nakamoto’s whitepaper in 2009 introducing a peer-to-peer system of payments using advanced cryptographic calculations and a public ledger system which is distributed in nature, cryptocurrencies have become the darling of the global fintech community.
The truth is that cryptocurrencies are still new and as such disruptions in different innovations and many different kinds of ways are bound to occur until the market settles in.
If there is any lesson to be learned from previous disruptive technologies that have changed how people live it is that new technologies will swing quickly in terms of prices for a bit and after adoption, they will then settle down.
Fact: Cryptocurrencies are Volatile
Cryptocurrencies are the most volatile asset available for trading today.
This is one fact that cannot be ignored.
Due to their volatility, many parties who are actively involved in cryptocurrency trading think that cryptocurrencies can be manipulated through pumping and dumping.
While that may have been possible during the 2017 crypto bubble, this year is a lot different.
The key players in the crypto space this time aren’t speculators.
The really big guns are now coming to the crypto space with all that they have.
From the big banks to hedge funds, everyone now wants a piece of the crypto pie.
As such, they would want to enter the cryptocurrency markets but will do so CAREFULLY.
This has prompted speculations that cryptocurrency markets are being manipulated by the big guns.
The truth is that cryptocurrency markets can’t be controlled by any single group of individuals.
Manipulation will be quite difficult there.
Fact: Cryptocurrencies have Little Regulation
Due to the major fact that cryptocurrencies function based on decentralization, regulatory oversight over them has been quite tricky.
This, of course, creates problems when it comes to the determination of revenues in terms of taxes when it comes to governments and in a few cases law enforcement.
That is changing however due to the introduction of artificially intelligent systems which can spot patterns across the distributed ledgers, and a better understanding by governments how they work, it is now possible to regulate those who use cryptocurrencies and not many of the cryptocurrencies themselves.
Cryptocurrencies wouldn’t have derived their values from themselves, would they?
Better regulation is now affecting the markets positively as we are currently seeing less volatile prices.
Myth: There are a Shadow Cartel Controlling Cryptocurrency Prices
Many believe this conspiracy theory that there exists a shadow cartel that controls cryptocurrency prices.
The question, therefore, is who can control assets that don’t have a central governing authority (for the most part)?
Public-interest cryptocurrencies such as Bitcoin don’t have cartels, no matter how hard any group of individuals try.
And the private-interest cryptocurrencies are still relatively too new for us to see how they turn out.
For even those private-interest cryptocurrencies, once the principles surrounding distributed ledger systems are obeyed,
This is the main reason why so many believe the hype that cryptocurrency prices are manipulated.
Myth: Certain Futures Settlements Affect Cryptocurrency Prices
Another absurd myth that has been making rounds is that settlement of bitcoin futures at a specific time of the month have been affecting cryptocurrency prices particularly those of Bitcoin.
The truth is that the total amount of futures settled will have to correlate with 10% of the total Bitcoin circulating volume for that to be even remotely possible.
Sources always cite uncorrelated data with too few precedents or confirmations from other parties for such to occur.
Statistics must always point to multiple sources, incidences and other verifiable points of analyzed data before it can be said that a trend has emerged.
And most of the data comes from one singular clearing house which again defeats the aim of the myth in the first place.
Bitcoin and most cryptocurrencies have already beaten the expectations of most analysts in this regard.
They are not subject to the whims of financial institutions.
Myth: The Whales are Still Around
While this may have been true during the 2017 crypto bubble, it certainly is not this time around.
The whales who were in all likelihood speculators during that period knew nothing about how cryptocurrencies work.
As such, as soon as crypto winter set in they all disappeared.
This time, there are new “Whales”.
These are smart whales, intelligent whales who can’t turn the tide of the crypto markets because they can’t control it.
Crypto markets have become more mature.
Governments have started regulating their portions.
Everyone has a different opinion on how to participate in the crypto revolution.
Speculation can’t rule anymore.
When it is all said and done, a new set of myths will emerge as they always do where new technologies are concerned.
And the truth will have to be told to challenge them.
What myths have you heard about the crypto space?
How can such myths be challenged?
Please let us know in the comments below!