Bitcoin Forum
December 07, 2016, 12:31:24 PM *
News: To be able to use the next phase of the beta forum software, please ensure that your email address is correct/functional.
 
   Home   Help Search Donate Login Register  
Pages: « 1 [2]  All
  Print  
Author Topic: Pump and Dump: Market Manipulation  (Read 3252 times)
tomcollins
Full Member
***
Offline Offline

Activity: 182


View Profile
June 27, 2011, 01:52:46 AM
 #21

Excuse me if this question is naive, but with such a small market what prevents someone from buying 10k worth of bitcoin, letting that be a view-able trade causing the price to increase, then dumping it when the market goes up a bit? Rinse and repeat you are manipulating the market with a large amount of cash and making a ton of money.

What other market manipulation tactics are we susceptible to with such a small market? What kind of voluntary oversight can we enact to discourage these tactics?


What's to say that the market will go up after you buy a large order?
1481113884
Hero Member
*
Offline Offline

Posts: 1481113884

View Profile Personal Message (Offline)

Ignore
1481113884
Reply with quote  #2

1481113884
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481113884
Hero Member
*
Offline Offline

Posts: 1481113884

View Profile Personal Message (Offline)

Ignore
1481113884
Reply with quote  #2

1481113884
Report to moderator
1481113884
Hero Member
*
Offline Offline

Posts: 1481113884

View Profile Personal Message (Offline)

Ignore
1481113884
Reply with quote  #2

1481113884
Report to moderator
bitcoinconnection
Jr. Member
*
Offline Offline

Activity: 56



View Profile
June 27, 2011, 02:04:38 AM
 #22

With pump and dump you need momentum buying to make this work. Not just one large buy order.
Teej
Newbie
*
Offline Offline

Activity: 14


View Profile
June 27, 2011, 02:14:54 AM
 #23

If you buy 10K worth, you'll suddenly buy up every coin between you and some new price.  Most of the market will just watch the spread expand and think "....wtf?"

You'll get some sheep chasing you, but you probably won't start a buying frenzy unless you time it with some real or fabricated "news" that suddenly makes everyone want to buy at any price.

And if you don't do that, you've suddenly got 10K worth of coin that the market's not willing to pay more than 7K for.

1HpByTQ6gCCpV8BdJFTy64EUQckrTE5JSw
tsvekric
Sr. Member
****
Offline Offline

Activity: 246


View Profile
June 27, 2011, 03:34:10 AM
 #24

because if you buy them all up and then sell them again you're paying up and down the same scale (or possibly a worse or better scale) so its not really manipulating the market at all... If you buy 10k BTC and then try and sell it high, you'll only sell it high if someone is suddenly willing to buy 10k that high.
Cluster2k
Legendary
*
Offline Offline

Activity: 1512


View Profile
June 27, 2011, 04:40:35 AM
 #25

The correct way to do a pump and dump is to progressively buy small amounts of BTC at ever higher prices in a thin market.  That's one of the reasons MtGox often sees silly trades like 0.01BTC at $16.05, 0.01BTC at $16.07, 0.01BTC at $16.10, etc.  It's designed to run a thin market up.  As soon as you have enough followers and there's an increased amount of buy orders, dump a large amount of BTC in one hit.  The outstanding orders are filled before anyone has a chance to react.  MtGox users are relying on the bot programmers to be clever enough to program in all scenarios.  All it takes is one buggy bot with access to a lot of bitcoins to seriously affect the market.

It helps when there's a temporary sense of euphoria in the market too, as seen in the run up to $30/BTC. 

Do not send bitcoins to me: 16b8s7pBJ9rUmsExNW25qD5VUqVqRPZuXu
100% solar powered bitcoin generation
Pages: « 1 [2]  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!