Blockchain24.co have posted an interview with Joshua Frank, the TIE’s CEO, about cryptocurrency manipulations. TIE is monitoring the case of fake trading volumes, and according to Frank, this is a very common practice for many exchanges. He also lists many other cases of frauds in crypto industry.
Looks like condition of out industry is not in the best shape.
Cryptos being manipulated is partially true. Let me explain.
Cryptocurrencies are manipulated. These are manipulated in a sense that there is no equal distribution of tokens, coins, and other cryptos. We have what we call WHALES - people or group of people who holds a larger portion of the total supply of a coin. There's a huge tendency that these whales can control the value of a certain token or coin they hold. One way of doing so is by moving huge amount of their tokens in the market/exchange, selling it at a certain value/price, and buying it with their EXTRA ACCOUNTS for the value they requested in their primary account.
For example:
A certain token, let's say TOKEN A, has a total supply of 1,000,000 tokens. One whale holds 50% of it (500,000 Tokens). The starting value/market value of that is $1. Then the total cap of this token is $1M. Let's assume that the other 50% is being distributed by 50,000 people (each has 10 tokens). If that whale put 100,000 tokens in the market and sold it for $2 per token, then bought it with his/her other accounts at $2, there will be an adjustment in the current market cap of TOKEN A. That will also affect the value of the tokens distributed among the 50,000 people.
1,000,000 Total supply @ $1 per token = $1,000,000
100,000 tokens sold @ $2 per token = $200,000
900,000 tokens will remain at $1 each before the remaining 100,000 tokens is sold at $2.
900,000 tokens @ $1 per token = $900,000
100,000 tokens @ $2 per token = $200,000
NEW TOTAL CAP = $1,100,000
1,100,000/1,000,000 = $1.1 -----> new value of 1 TOKEN A