[2017-12-25] Market manipulation: reality or fantasy

[tropyc]

The impressive rise of the cryptocurrency market capitalisation followed by a dramatic correction has left newcomers shocked about price volatility. 
50% price swings over a short period (weeks if not days) aren't uncommon for experienced market watchers and crypto enthusiasts.

After the rapidly increasing awareness of cryptocurrency to mainstream media, regulators and institutionalised investors, many have suggested that the market is heavily manipulated, if not controlled by a handful of stakeholders.

Can these allegations turn out to be true?

• The market is unregulated
• Exchanges act just like banks
• Listing a coin impacts its price tag
• Whales own most the crypto out there

Read more: https://www.tropyc.co/news/market-manipulation-reality-or-fantasy/

Happy holidays from the tropyc team.

[CryptoBry]

Yes, those can be true. We have to always remember that this industry is still new and there are growing pains in here which scamming people are so readily exploiting to the hilt. Manipulation can happen n any industry and it this can be true in stocks and other traditional investment tools...how much more with a new platform like cryptocurrency? That is quote expected and that is why, much as we don't want to, there is a need for regulations here either imposed by the authorities or self-regulation which we all prefer or even both. The road to the future has been set for cryptocurrency but there would be humps, bumps and roadblocks along the way. This will never be smelling-roses-while-walking-in-the-park kind of thing.

[odolvlobo]

Unless anyone can produce any real evidence of "manipulation" (which I have yet to see) having any effect on the market, these claims of manipulation must be considered to be fantasy.

People are very susceptible to confirmation bias. They see what they want to believe and tend to ignore evidence to the contrary. Read about "street light interference" and be amazed.

[btcton]

Unless anyone can produce any real evidence of "manipulation" (which I have yet to see) having any effect on the market, these claims of manipulation must be considered to be fantasy.

People are very susceptible to confirmation bias. They see what they want to believe and tend to ignore evidence to the contrary. Read about "street light interference" and be amazed.

I completely disagree. I would personally be very surprised if there weren't any market manipulation happening in the crypto markets. While there is definitely genuine market movement happening, there are organizations holding enough Bitcoin to create big buy or sell walls in exchanges to control the flow of trade. It is not a hard thing to do, all you need is control over a big enough amount of the currency you are trying to trade. On GDAX, for example, many buy and sell order for the BTC/USD pair get dropped and created in a whim, and the timings lead me to believe it is all planned. Of course, I have no hard proof, but it seems much more likely to me that it is happening rather than that it is not.

[Kakmakr]

It is only logical to deduce that with every commodity where there were early investors with a large quantity of that commodity, that they will use that advantage in their favor to manipulate the market. This is not uncommon and we had some previous instances where these Whales has put up a Sell or Buy wall to make a point or to manipulate the flow of these exchanges.

While whales exist, the potential will be there to manipulate the markets.

[odolvlobo]

Unless anyone can produce any real evidence of "manipulation" (which I have yet to see) having any effect on the market, these claims of manipulation must be considered to be fantasy.

People are very susceptible to confirmation bias. They see what they want to believe and tend to ignore evidence to the contrary. Read about "street light interference" and be amazed.

... Of course, I have no hard proof, but it seems much more likely to me that it is happening rather than that it is not.

No proof --> fantasy.

... the potential will be there to manipulate the markets.

Potential? Maybe or maybe not. Again, no evidence --> fantasy.

I would also like to note that I don't feel that many situations that some people might consider manipulation are really manipulation. Just as fee-paying Bitcoin transactions that seem purposeless can't really be considered spam, placing orders can't be considered manipulation. For example, is a "sell wall" manipulation or is it just a large order? Are high frequency traders really manipulating the market by placing and canceling orders, or are they just gaining information or perhaps using game theory to compete against other traders?

[cynical]

i think it is part of the territory to have market manipulation.
yes we have a decentralized and unregulated market
and yes the majority of 'investors' want to make more crypto, money as easy as possible.
market manipulation, who is there to stop it?

[btcton]

Unless anyone can produce any real evidence of "manipulation" (which I have yet to see) having any effect on the market, these claims of manipulation must be considered to be fantasy.

People are very susceptible to confirmation bias. They see what they want to believe and tend to ignore evidence to the contrary. Read about "street light interference" and be amazed.

... Of course, I have no hard proof, but it seems much more likely to me that it is happening rather than that it is not.

No proof --> fantasy.

That is not a good way of thinking. You are acting like this is some sort of legal case where traders are "innocent until proven guilty." The problem is that this is not a legal case. For instance, if a person gets hired at a store and the customer service reviews of the store happen to go down in the weeks following this, it is reasonable to conclude that the new employee is to blame in some part. Sure, there is no hard proof of this, but you cannot consider the possibility a "fantasy". In fact, it would be ignorant to do so. The same goes with traders and market movements.

[digodk]

Unless anyone can produce any real evidence of "manipulation" (which I have yet to see) having any effect on the market, these claims of manipulation must be considered to be fantasy.

People are very susceptible to confirmation bias. They see what they want to believe and tend to ignore evidence to the contrary. Read about "street light interference" and be amazed.

... Of course, I have no hard proof, but it seems much more likely to me that it is happening rather than that it is not.

No proof --> fantasy.

That is not a good way of thinking. You are acting like this is some sort of legal case where traders are "innocent until proven guilty." The problem is that this is not a legal case. For instance, if a person gets hired at a store and the customer service reviews of the store happen to go down in the weeks following this, it is reasonable to conclude that the new employee is to blame in some part. Sure, there is no hard proof of this, but you cannot consider the possibility a "fantasy". In fact, it would be ignorant to do so. The same goes with traders and market movements.

I agree. Yes, proving manipulation would be the ideal case, but that doesn't mean we should not be suspicious or at least questioning market movements. Just because manipulation is not plainly clear doesn't mean we should assume all is fine in coinland.

[odolvlobo]

Unless anyone can produce any real evidence of "manipulation" (which I have yet to see) having any effect on the market, these claims of manipulation must be considered to be fantasy.

People are very susceptible to confirmation bias. They see what they want to believe and tend to ignore evidence to the contrary. Read about "street light interference" and be amazed.

... Of course, I have no hard proof, but it seems much more likely to me that it is happening rather than that it is not.

No proof --> fantasy.

That is not a good way of thinking. You are acting like this is some sort of legal case where traders are "innocent until proven guilty." The problem is that this is not a legal case. For instance, if a person gets hired at a store and the customer service reviews of the store happen to go down in the weeks following this, it is reasonable to conclude that the new employee is to blame in some part. Sure, there is no hard proof of this, but you cannot consider the possibility a "fantasy". In fact, it would be ignorant to do so. The same goes with traders and market movements.

I agree. Yes, proving manipulation would be the ideal case, but that doesn't mean we should not be suspicious or at least questioning market movements. Just because manipulation is not plainly clear doesn't mean we should assume all is fine in coinland.

I agree that the possibility is real, though actual occurrences are rare and inconsequential. However, people frequently believe that specific moves in the market are caused by manipulation without any evidence (other than the movement itself), and that is fantasy.

[lotto-fan]

Think about IPOs in stock exchanges, what are the difference you see? It's exactly the same, so it is just normal and don't blame the crypto currencies.

[btcton]

Unless anyone can produce any real evidence of "manipulation" (which I have yet to see) having any effect on the market, these claims of manipulation must be considered to be fantasy.

People are very susceptible to confirmation bias. They see what they want to believe and tend to ignore evidence to the contrary. Read about "street light interference" and be amazed.

... Of course, I have no hard proof, but it seems much more likely to me that it is happening rather than that it is not.

No proof --> fantasy.

That is not a good way of thinking. You are acting like this is some sort of legal case where traders are "innocent until proven guilty." The problem is that this is not a legal case. For instance, if a person gets hired at a store and the customer service reviews of the store happen to go down in the weeks following this, it is reasonable to conclude that the new employee is to blame in some part. Sure, there is no hard proof of this, but you cannot consider the possibility a "fantasy". In fact, it would be ignorant to do so. The same goes with traders and market movements.

I agree. Yes, proving manipulation would be the ideal case, but that doesn't mean we should not be suspicious or at least questioning market movements. Just because manipulation is not plainly clear doesn't mean we should assume all is fine in coinland.

I agree that the possibility is real, though actual occurrences are rare and inconsequential. However, people frequently believe that specific moves in the market are caused by manipulation without any evidence (other than the movement itself), and that is fantasy.

You are right in that specific instances could just be "fantasy" rather than actual planned market manipulation, but I don't think that is what the question was. I don't like the use of the word "fantasy" here by OP as it basically conveys a very black and white picture where market manipulation either is in full effect or does not exist at all. A more correct term would be that it is "possible", if not "probable". It is simply too easy for there to not be some financial party that has been benefiting from planned market movements to increase their wealth, whether this be an individual, an organization, or a fund that is causing it. A wall can be set up by relatively small amounts of bitcoins in the magnitude of hundreds, which considering some people's worth, is definitely achievable.