A very good solid write-up by David Gerard showing exactly how the bitcoin price is manipulated and people are cheated.
If you do not want to read the whole piece this is the important part:
When you buy normal securities or commodities, you assume that the trading environment is regulated sensibly, and that the exchanges keep to the rules set by law and, fundamentally, won’t mess you around.
You can’t assume this at all in crypto trading. This is what “unregulated” means.
The important thing about securities regulations is that every single one is there because someone ripped a lot of people off that way. They ensure market integrity.
(One glaring example was the 2016 collapse of iGot in Australia, which hit a lot of small-time retail investors: “I just assumed that since they’re in Australia there would be some sort of safety net or regulation or something like that — bare minimum — where he could be accountable for his actions.”)
There are various shenanigans that are banned on real securities exchanges for good reason,
but are standard in crypto:wash trades — where you trade with yourself, to pump the price up or down, or just create the illusion of trading volume. You could literally do this in the Bitfinex trading engine quite recently.
spoofing — where you place a large order to create the illusion of market optimism or pessimism, and cancel as soon as the price gets anywhere near it. This is endemic on Bitfinex and Coinbase/GDAX.
painting the tape — like wash trading, but with two or more participants. Mark Karpelès admitted in court that he had been using the “Willybot” to pump up the Bitcoin price on the Mt. Gox exchange during the 2013 Bitcoin bubble.
front-running — where an exchange operator takes advantage of a buy or sell order before other customers can.
insiders with access to the database trading on their own exchange — Bitfinex officers trade on the exchange themselves. They state that they avoid conflicts of interest, but there is no oversight or transparency on this.
The full piece is here:
https://davidgerard.co.uk/blockchain/2017/12/17/why-you-cant-cash-out-pt-1-why-bitcoins-price-is-largely-fictional/