Crypto Exchanges on the Abyss: How Traders are Withdrawn and the Bitcoin Price Manipulated

In the past, much has been reported about hacks and IT vulnerabilities at crypto exchanges. It is not secret knowledge that manipulation and fraud at crypto exchanges are very popular. It is difficult to trust the price movements, because the suspicion that insider trades control the ups and downs is persistent. And rightly so.

Only recently we reported about a conversation between two insiders who talked about the apparently massive price manipulation on the BitMex crypto exchange. Since short positions are now also possible, i.e. bets can also be placed on falling prices, the incentive to manipulate prices is even greater. In addition, it has become even cheaper with the help of levers up to 50 times the invested capital. When the “big Wall Street boys” enter the market, they can easily manipulate the small and unregulated crypto market.

This is how Bitcoin secret manipulation works

In concrete terms, some actors are said to have succeeded in programming a technical information advantage for themselves. This information advantage enables them to see when market participants placed order orders. Among other things, this Bitcoin secret enables them to find out which brands have been used to place important stop orders: Accordingly, they can see before all other market participants when the house of cards collapses and make a good deal with short positions.

It often happens that enormous price movements whip the market up or down without a market economy cause being identified. Most traders then look helplessly at the Bitcoin price and ask themselves what fundamental or chart technical impulses have triggered the pull effect – without result.

Wash Trading pretends high volume
In addition to individual traders, it is even the stock exchanges themselves that are repeatedly under suspicion of manipulation. For example, the crypto exchange is said to have operated BitForex Wash Trading. In wash trading, the highly frequented buying and selling of assets pretends a high trading volume. This is intended to give the impression to the outside world that the exchange is liquid and secure. In reality, however, it is often only the stock exchanges themselves or groups of traders who play a set-up game with the ignorant investors.

Stock market manipulation: not only in the cryptosoft sector

Although there are also isolated cases of insider trading on regulated stock exchanges, this is not the case to this extent, especially since most markets are significantly larger than the cryptosoft market. Here is the review. The trading turnover for the EUR/USD currency pair, for example, is approx. 3 to 5 trillion US dollars per day. The crypto market, on the other hand, has a volume of just 10 to 20 billion US dollars. On small and unregulated exchanges, which cover small markets, it is much easier to provide movement than on highly liquid, capitalised and institutionalised exchanges. Especially since market power there is distributed among many more players and is less centralised than in the crypto market.

Stock exchanges not very transparent for Bitcoin & Co.
In addition, transparency is significantly higher on regulated stock exchanges and capital can be better allocated. If, for example, major shareholders, persons with insider knowledge or board members of a listed company carry out trading transactions with the corresponding share, they must make them public. If they do not do so, they commit a serious crime. This deterrent effect does not exist in the Bitcoin sector. Insider trading is not a punishable offence. Nobody, if they pay their taxes, needs to be afraid of legal consequences. It is an invitation to all those who do not allow themselves to be held back by moral concerns.

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