12 Months of Bitcoin – May 2018: Pump and Dumps, Decentralisation, Virtual Horseracing. #38

There’s no Live way to buy or trade Crypto. It’s all online in Currency Exchanges. You don’t walk around with Ripple in your pocket, or have Litecoins in a jar at home. You buy it online, you sell it online, and can even spend it online. Most people don’t care about spending it though. They just want to get rich, somehow, and often don’t even know the purpose of the coins they’re invested in. It’s a bit like betting on Virtual Racing in a bookies – a shiny gloss of chance on a predetermined outcome. The truth is the price of crypto can be easily manipulated by what the jargon calls “Whales.” This means a Millionaire/Billionaire or consortium of the same can decide whether or not to influence the price of any given coin by either investing heavily, (Pumping) or selling Drastically (Dumping).

A favourite word in the Crypto space is ” Decetnralization” which means there is no one governing body of the currency – therefore it can’t be manipulated and is valued by consensus of those that determine its value when they buy it or sell it. But how can you value something when you don’t even know what it is? When most people bought Bitcoin they hadn’t a clue wtf it even was. They just saw Dollar Signs going up. And Dollar Signs coming down. So imagine a group of whales get together and start pumping a coin and the word goes out that it’s rocketing. Then everyone joins in and the whale’s money + public money is now flooding in. The price goes up, up and up and when the whale is happy that he/they have trebled their money they sell and puncture the bubble and then it starts coming down, down, down and most people lose money except those that pumped it in the first place and knew what was going to happen. Your only hope is to get in early and sell somewhere in the middle of the Pump (if you happened to know when that is). It’s also not helped by the “Hodl” philosophy which dictates that you never sell your crypto. You Hold on for Dear Life – even during an 80% crash. If you’re really smart you know all about Dollar Cost Averaging which means that you should buy it on the way down because you’re getting it for cheaper than when you bought at the top and when it hits bottom you average your losses and multiply your gains for when it pumps again. I wonder who came up with that idea?

(Study: Pump and Dump Schemes Account for 7$ Million of Monthly Trade Volume
https://coinstats.app/news/11091615_Study-Pump-and-Dump-Schemes-Account-for-7-Million-of-Monthly-Trade-Volume)

If you’re not a millionaire there’s a whole host of Telegram Groups that run Pump and Dump sessions. You join the group and they wait for it reach a few thousand members. Then, when they have enough “investors” they announce that they’re going to pump a certain currency, at a certain time, in a certain exchange. So, for example, they announce to their 2,000 followers that they’ll be pumping a coin tonight and to log in at 7.55pm. Then when everyone is ready, they shout: ‘Ok, guys, tonight, at 8pm, we’re all going to buy Cardano on the Binance exchange. We’ll pump, pump, pump until it peaks at about 50% profit and then get out. Everybody ready? Let’s go!’ So the general public is looking at Cardano thinking it’s going up in price because it has intrinsic value while in reality it’s getting pumped by a group collective strangers or whales or both. But hey, don’t worry, it’s all decentralised, right?

Mick.

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