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Banks’ Bad Behaviour: Market Manipulation

Here at Crypto Clothesline, we’ve asked a number of experts and enthusiasts in their fields to comment on the areas of interest that came up in the interview with CryptoGat (Ivan S.) who has over 70k followers on Twitter and recently had a fall from grace after he was found to be part of a market manipulation scheme.

Martin McGinty, founder of in Perth Western Australia, and long-time fan of CryptoGat, talks to Crypto Clothesline about staying focussed and responsible in the crypto-space.

Firstly the girls from Crypto Clothesline want to say a big thanks to Martin McGinty of BlockBoxx, for suggesting in person to Ivan S. (CryptoGat) that he chat with us about his recent ‘pump and dump’ blow-out, after returning from Consensus in New York this year, 2018.

Martin comments that the world of cryptocurrency and trading is still very much like the Wild West.

He talks of wacky tweets online inviting you to get into pump and dumps, and crazy giveaway green candles (on trading platform tables) that clearly indicate there’s likely market manipulation going on, especially with low cap coins.

Low cap coins are those which are still cheap.  Cheap to buy in bulk, (which is easy to do when a group of buyers pool their financial resources) thereby pushing or ‘pumping’ the price of the coin up.  This is the first wave, the first tier – the inner circle of investors, or those in the ‘know’ about a planned pump and dump.

Sometimes the people in this group can be ‘influencers’: players other people trust and follow.  Often these influencers have helped make their audience a HEAP of cash, so there’s been a history of positive experiences and the development of trust. 

CryptoGat was part of this inner core – a trusted influencer.

Therein comes the second wave of ‘investors’.  These are usually the ones who follow (blindly?) the first group.  They are the ‘followers’ on Twitter and other social media platforms. They buy in next, pushing the green candle (an indicator on trading graphs which shows a price of a coin is rising) up even further.  They’ve paid more for their coins than the first group but have parted with less of their moulah than the next ones – the third tier or ‘Buy-At-The-Top’ suckers.

BATTs are the people who, suffering from FOMO (Fear of Missing Out) buy in thinking they’re missing the opportunity (which in effect, has an element of truth in it.). They paid top dollar because they’re trying to ride the wave, unaware that’s it’s just about to crash.  Effectively they have missed the opportunity but pay the most expensive (albeit artificial) price for the coin anyway: nowhere near its true value.

Here comes the ‘dump’ part: tier one (insiders) collectively sell their coins off at the top end, making a tidy profit.  Buy low, sell high.  Big grins.

The second tier follow suit: they follow what the first guys do. “If they’re getting out, then I will too.”  They may make a little, break even, or lose a lot, depends how quickly they move.

Given the candle can crash down in price due to the sudden sell-out over the course of only a couple of hours (even while you sleep), if you don’t get out, then you may miss out and lose your invested cash big time. Not so grinning…

And then the last guys come in wondering what the deal is: only to find that the price of their top-end hasty FOMO purchase has just crashed back down to its original value.  In their case, they’ve bought high, and been cashed out low.  If they have a heap of their own Fiat (cash) money in their trading accounts, the falling trade and falling price could keep draining their account.  If they have stop-losses in places, then the fall could be cushioned.  Either way, they’re not making money and they’re not grinning.

Ripped off, angry, hateful and blame-hungry – they are quick to point the finger and give the finger online too.

Martin McGinty, while in no way supportive of these pump and dump schemes, wisely points out however that the Big Boys – the banks and larger corporations, are often even sleazier players in the trading game, than these inner circle groups are… The banks just seem to exercise more poetic license than anybody else. (Said nicely.)

It actually means the banks get away with shit, and we can’t do much about it… They do this stuff on a WAY bigger scale.

“I wouldn’t want to hold someone responsible long-term especially when there are so many bigger players manipulating at such a grander scale. That’s something we need to accept with the territory.

JP Morgan – Jamie Dimon decried cryptocurrency, then came out and acquired crypto.  What you hear and what is going on behind the scenes are often two different stories…”

“A huge global investment bank which had been very anti-crypto, then took a position with a circle and went on to form a partnership with Poloniex.  You don’t have to go too far to see ‘inconsistent messaging’ across the space.” says Martin.

(Note: Poloniex is a Bitcoin/digital asset exchange.)

Martin is quick to acknowledge that not everybody behaves, but maybe the light is shone upon the crypto world because it’s so new.  There are plenty of other big banky fish out there needing to be hauled in too.

Of CryptoGat himself, Martin admits some affection and affinity with what he’s done in the past.

This young 23-year-old came out with a public declaration of having been involved in a pump and dump scheme.  Nevertheless, this same guy helped a lot of people make money, he helped them understand HOW to make money, and also how to make better decisions when trading: he’s done a lot of good in the space over the past year or more.

“It’s easy for players, large and small to get involved in the wrong sort of deals but you don’t throw the baby out with the bath water – people make mistakes.”

Watch out for these scams people: young and old!  Inexperienced and experienced players are getting sucked in, and it’s every individual’s responsibility to do due diligence and research the offers made.

Listen to the full podcast here:

By Abheeti Kathryn Pass

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