Is Bitcoin truly free of Pump and Dump Schemes?

[Faisal2202]

I was searching about wash trading and how it could impact the crypto market, those who have no or less idea what is wash trading, it's manual or automatic (high-frequency bot trading) making trades of tokens to increase its trading volume to create big candles (increment in the price of that token).

I had a firm belief in BTC that it could not be used in the Pumps and Dumps Scheme because of its scarcity (limited supply, high demand) and decentralization. I posted a topic about Don’t Fall Prey to these Market Sentiments and Save your Bitcoin in which i covered 4 major market sentiments. One of them was the Pumps and Dumps Scheme, but "this market sentiment has no impact on BTC price". That's what i learned in that topic by reading members' replies.

So i can conclude, most of us think of BTC as P&D-free. But i think that's not true when i read a report more-than-half-of-all-bitcoin-trades-are-fake by Forbes.

They manually calculated the trading volume of BTC and compared it with BTC's trading volume of CMC, Coingecko, and other exchanges. These are some key points to their results of the report

1. Forbes estimates the global daily bitcoin volume for the industry was $128 billion on June 14. That is 51% less than the $262 billion one would get by taking the sum of self-reported volume from multiple sources.
2. In terms of how much bitcoin activity takes place at these firms, 21 crypto exchanges generate $1 billion or more in daily trading activity, while the next 33 exchanges had volume between $200 million and $999 million across all contract types, spot, futures and perpetuals.
3. Altogether, the lesser regulated exchanges in our study account for approximately $89 billion of the true volume (they claim $217 billion).
4. In the Western world and particularly in the U.S., it is tempting to think of bitcoin only trading against either the U.S. dollar or the euro and British pound. But some of the largest trading pair activity occurs against fiat currencies like the Japanese yen and Korean won and against major stablecoins like Binance U.S. dollar and the USD coin.

Source

Now i am wondering is it true? like really BTC is involved in P&D schemes because Wash trading is another term for P&D schemes and both have the same purpose to manipulate the BTC trading volume to control its price for their own benefit.

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[bitmover]

I had a firm belief in BTC that it could not be used in the Pumps and Dumps Scheme because of its scarcity (limited supply, high demand) and decentralization. I posted a topic about Don’t Fall Prey to these Market Sentiments and Save your Bitcoin in which i covered 4 major market sentiments. One of them was the Pumps and Dumps Scheme, but "this market sentiment has no impact on BTC price". That's what i learned in that topic by reading members' replies.

I think you are mixing different things together.

Pump and dump is a market manipulation practice.  Even is highly regulated markets, such as the stock market,  there are pump and dump schemes.

Bitcoin scarcity is totally unrelated to market manipulation. Scarcity makes it more valuable,  but what would make it resilient to manipulation would be regulations,  what bitcoin lacks.

Who can forget Elon Musk playing around, saying he was going to use bitcoin as a payment method in tesla,  then he suddenly changed his mind? This is market manipulation

[MusaMohamed]

So i can conclude, most of us think of BTC as P&D-free. But i think that's not true when i read a report more-than-half-of-all-bitcoin-trades-are-fake by Forbes.

There are many reports, researches and articles about wash trading volume in cryptocurrency market. It is more seriously with modern trading which is supported by trading bots. Now people use bots to trade and manipulate the market.

Manipulation exists in all markets but with trading bots, it will help market makers to spend less time in front of the screen and still execute their manipulation plan very well. It does not only exist in this market.

They manually calculated the trading volume of BTC and compared it with BTC's trading volume of CMC, Coingecko, and other exchanges. These are some key points to their results of the report

Manually you can watch buy, sell orders and their changes to detect wash trading activities. However, if you want to prove it you must have bots to detect it and make calculations. It can not be achieved manually.

[mv1986]

I had a firm belief in BTC that it could not be used in the Pumps and Dumps Scheme because of its scarcity (limited supply, high demand) and decentralization. I posted a topic about Don’t Fall Prey to these Market Sentiments and Save your Bitcoin in which i covered 4 major market sentiments. One of them was the Pumps and Dumps Scheme, but "this market sentiment has no impact on BTC price". That's what i learned in that topic by reading members' replies.

I think you are mixing different things together.

Pump and dump is a market manipulation practice.  Even is highly regulated markets, such as the stock market,  there are pump and dump schemes.

Bitcoin scarcity is totally unrelated to market manipulation. Scarcity makes it more valuable,  but what would make it resilient to manipulation would be regulations,  what bitcoin lacks.

Who can forget Elon Musk playing around, saying he was going to use bitcoin as a payment method in tesla,  then he suddenly changed his mind? This is market manipulation

No regulation in the world is effective enough to fully shut down market manipulation. And to be honest, the term "manipulation" is almost a philosophical one and becomes even more complicated when we talk about assets that are traded globally.

There are external events like the pandemic or the war which have massive influence on the market and surely a couple of people knew better and earlier than others for whatever reason, and probably a lot of people benefitted from the crash during the Covid lockdowns or from investing in the defense industry when it became more and more clear what's going to happen.

Assuming you are running a business that is benefitting from a crisis and you start lobbying for something like a vaccine, you use your financial and political power to convince a government to introduce an obligatory vaccination, is that market manipulation?

Or Novogratz who follows a certain pattern when and how he starts to tweet either good or bad about the crypto space. Is it manipulation regardless of his intention or does his intention actually make something manipulation? What if he makes the price move up even though he didn't want to? Or if the price doesn't move at all but he thought he could make it crash?

Is Elon Musk not allowed to say anything ever again? Does the follower size decide whether it was manipulation? Which follower count then? Or which price movement in relative terms?

There are many many things that make it hard to come to a crystal clear judgment whether there was manipulation or not. And sometimes someone manipulates a market in a jurisdiction where authorities are ok with it, but no other outside authorities can enforce any laws.

[dimonstration]

Now i am wondering is it true? like really BTC is involved in P&D schemes because Wash trading is another term for P&D schemes and both have the same purpose to manipulate the BTC trading volume to control its price for their own benefit.

Wash trading only focus on increasing exchange volume through a series of fake by and sell using market maker bot but it doesn’t pump the market at all because it just keep buying and selling as the market moves. Still those buy and sell from legit traders are the one dictates the price pump and dump and not the wash trasing from exchange to increase volume.

Wash trading is true but pump and dump scheme is not from wash trading because exchange don’t need to pump the market just to fake their volume. They can do it by just quick buying and selling with low price spread.

[valsy]

I had a firm belief in BTC that it could not be used in the Pumps and Dumps Scheme because of its scarcity (limited supply, high demand) and decentralization. I posted a topic about Don’t Fall Prey to these Market Sentiments and Save your Bitcoin in which i covered 4 major market sentiments. One of them was the Pumps and Dumps Scheme, but "this market sentiment has no impact on BTC price". That's what i learned in that topic by reading members' replies.

I think you are mixing different things together.

Pump and dump is a market manipulation practice.  Even is highly regulated markets, such as the stock market,  there are pump and dump schemes.

Bitcoin scarcity is totally unrelated to market manipulation. Scarcity makes it more valuable,  but what would make it resilient to manipulation would be regulations,  what bitcoin lacks.

Who can forget Elon Musk playing around, saying he was going to use bitcoin as a payment method in tesla,  then he suddenly changed his mind? This is market manipulation

Yo, you are always answering my questions, thanks bro

[Odusko]

Market manipulation has nothing to do with the real trading volume of the coins and also note that pump and dump can happen in any market even the traditional market, and also note that most exchange volumes are fake volume and at that, we may have to compare one or two exchanges volume to know the actual volume of the market, bitcoin may have little influence of market manipulation, unlike altcoins that are centralized and easily controlled by the owner or a big bag holder.

[NeuroticFish]

I had a firm belief in BTC that it could not be used in the Pumps and Dumps Scheme because of its scarcity (limited supply, high demand) and decentralization.

I think that in reality nothing is really free of pump and dumps.

But for bitcoin pump and dumps attempts can get diluted by arbitrage and the fact there are a good number of CEX, DEX and OTCex all competing, so they (P&D) do need big effort.
I've read Mt Gox did that. Social engineering (news/FUD) together with sudden movements in order to trigger small trader safety nets (stop loss and maybe others too), maybe together with some wash trading (most pretending it never happens) can be seen as the modern P&D. Are they so big and happen so often? I don't think so, hence there's not so much to worry about.

[bitmover]

Is Elon Musk not allowed to say anything ever again? Does the follower size decide whether it was manipulation? Which follower count then? Or which price movement in relative terms?

When a very influential person, who controls billions of dollars,  just say crazy stuff to see the price goes up and down , that is manipulation.

There are many rules in the stock market , and such declarations cannot be made freely. People who have privileged or confidential information not released yet to the public cannot just be tweeting about it.

In stock market this kind of behavior is not allowed and he would have face fines.

[serjent05]

Now i am wondering is it true? like really BTC is involved in P&D schemes because Wash trading is another term for P&D schemes and both have the same purpose to manipulate the BTC trading volume to control its price for their own benefit.

Some of the regulated trades are subject to pump and dump, what more the one that is unregulated.  Bitcoin just like any other altcoin are also subject to pump and dump.  Though as the price of Bitcoin increases, it slowly gets away from this pump-and-dump scheme. 

I disagree with you about wash trading being the pump and dump scheme.  Wash trading is trading between the same group to increase the trading volume of coins or tokens.  Having a huge volume has benefits to the project.  If they get into the top 10, they are easily seen by other users, and that is free advertisement for the project.  While the pump and dump scheme has another motive and that is to profit by building up the price of the coins then dump to gain profit.  They often repeat it so they buy at the bottom making their position stronger with a larger amount of coins and profit from the pump-and-dump scheme.

[romero121]

Market have got impact out of the influencers. This means people who are good enough with a big volume of holding or who were at a higher position in the society with money making or technology development have got the ability to make some changes in the market. However these changes are temporary and could be driven to some extent. In my understanding influencers make some pump and dump in the market, and I'm not sure whether the pump and dump telegram channels and other sources were able to do it.

[Fivestar4everMVP]

You stated the fact already, due to bitcoin's current price, limited supply and high demand, it will be pretty difficult to manipulate its price, not saying it's not possible but it will be pretty difficult.

Although manipulation comes in different forms, manipulation can happen by using money - in this case, any body wanting to manipulate the price of bitcoin through money, must have a lot of money to be able to buy and sell plenty of bitcoin at once so that it could impact the bitcoin market.

Another way manipulation can happen is through spreading negativity - those who have huge fellowership and influence could that to manipulate the price of bitcoin - but there is no guarantee with this method, if at all it worked, it can only be for some time, and people would stop listening.

[mv1986]

Is Elon Musk not allowed to say anything ever again? Does the follower size decide whether it was manipulation? Which follower count then? Or which price movement in relative terms?

When a very influential person, who controls billions of dollars,  just say crazy stuff to see the price goes up and down , that is manipulation.

There are many rules in the stock market , and such declarations cannot be made freely. People who have privileged or confidential information not released yet to the public cannot just be tweeting about it.

In stock market this kind of behavior is not allowed and he would have face fines.

You took the easiest part out of my comment and repeated it, but left out a statement to the harder part. Elon Musk is probably one of the easier examples when we talk about "influential" and "billions of dollars". But there are many more edge cases where courts have a hard time to draw the line because they would have to shift that line in the next case most likely anyway.

When it is about obvious insider information, of course there are laws and there is no discussion. But in most cases tweets or info that gets spread is a lot more on the edge. There have been many cases where executives or people closely related to them sold shares or bought shares before some info was made public. Guess what, nobody could prove that at the point in time when sales or purchases were made, the seller or buyer was already aware of that info.

Some of the stuff seems obvious, and some of the stuff is on the edge. The few cases where obvious market manipulation gets caught or fined are not the ones that dominate our global markets. It is mostly the ones that go undetected because it's almost impossible to prove those cases.

And again, where does true manipulation start and where does it end? The easy cases aren't really that interesting.

[Faisal2202]

it doesn’t pump the market at all because it just keep buying and selling as the market moves.

I think it does not matter either market is moving equally in buying and selling trading volume it do have an effect on price.

Because i have learned so far that Wash trading mainly exists to manipulate the market. How "wash trading" is perpetuating crypto fraud You can take few examples from this article to understand what is wash trading and how it has the same purpose as Pump and Dump Schemes has. I am not saying you are wrong but I am saying I might not be wrong.

Market manipulation has nothing to d....

That's an obvious thing that market manipulation brings fake trading volume and it is totally unfair for real trading volume to share the same room with fake ones. (which means fake and real both combined used as "trading volume" there is no option of "fake trading volume" and "real trading volume" we can see on any of the websites).

In stock market this kind of behavior is not allowed and he would have face fines.

Yes, those who try to manipulate the market must have to face penalties. Just like the ones who tried to manipulate the market a few days back, Actor, Actress & Influencers are charged for conducting illegal Crypto Schemes by Flexystar.

The same big celebrities who like to play with people's trust have to face penalties. But another question arises here why it did not happen? Like why they did not charge with money to manipulate the market, to play with users' money.

Profit by building up the price of the coins then dump to gain profit.  They often repeat it so they buy at the bottom making their position stronger with a larger amount of coins and profit from the pump-and-dump scheme.

Understood, You really cleared it up, so this is what you are trying to say, Wash trading scheme is used to increase BTC price, (not only of BTC of course) but in Pump and Dump scheme, activists also dump the price to gain profit by taking entry in "short". Please correct me, if i am wrong.

[Yaunfitda]

Not sure where you got the P&D in Bitcoin. As far as I know, it is being used to altcoins as they can easily be used by some entities behind to push their projects or any coin for that matter.

But with BTC, it's going to be hard to this so called pump and dump, it will take billions and several whale to collude with each other just to move the price to the direction that they want. Also, there are several members here who believed that pump and dump and bitcoin should not go in one sentence, just saying.

[SquirrelJulietGarden]

I think that in reality nothing is really free of pump and dumps.

But for bitcoin pump and dumps attempts can get diluted by arbitrage and the fact there are a good number of CEX, DEX and OTCex all competing, so they (P&D) do need big effort.

If it is a free market, everyone who are smart and have enough power can pump and dump it. If it is a centralized and controlled market like by governments, it will be pumped and dumped by governments.

Markets are not markets if there is no wave including pumps and dumps and I would feel very boring if cryptocurrency market don't have such manipulations. If you want to be safe and won't be affected by manipulations, pumps and dumps, you can invest and hold. If you trade with Spot or worse trade with Margin and Futures, you will be seriously affected by manipulation.

[yazher]

I think you are mixing different things together.
Pump and dump is a market manipulation practice.  Even is highly regulated markets, such as the stock market,  there are pump and dump schemes.
Bitcoin scarcity is totally unrelated to market manipulation. Scarcity makes it more valuable,  but what would make it resilient to manipulation would be regulations,  what bitcoin lacks.
Who can forget Elon Musk playing around, saying he was going to use bitcoin as a payment method in tesla,  then he suddenly changed his mind? This is market manipulation

You're right pump and dump coins are usually from those altcoins that are newly created whenever there's hype or just something trending on the internet and they create some coins along with it, just like what happened to Squidgame tokens which were one of the biggest pump and dump science has ever happened in the crypto market and bitcoins has nothing to do with it just like any other coins when they want to scam people with their scam strategy to create a hype then dump the coins when they see lots of people already bought it.

[slashz9]

i think for now the price of bitcoin, still can easy pump and dump if the people owned it do buy and sell in a short time.
its just like they just take some profit from do that, but if btc already separated and many people buy it and own it, someday it will hard to be manipulated.