Is Bitcoin a Giant Pump and Dump?
After an evening of perusing the internets a post on reddit stuck out to me. “Bitcoin is being manipulated like other alt-coins” posted by mitchr4 (See screenshot below)
The writer, mitchr4, goes on to explain that he is or has been an alt-coin trader for a while and has seen certain pump-and-dump patters emerge in the alt-coin industry. mitchr4 goes on draw parallels between the recent price spikes and downturns in the bitcoin market and the pump-and-dump nature of altcoins.
Big investors are playing off hype, taking the price up. We all go nuts, and then they dump on us… When we hit 450 the trading was at a volume that was too high. I’ve seen it in all the altcoins (on a lesser scale and shorter time frame)….the volume creates a frenzy… Everyone sees the volume, thinks it’s a great sign, buys, and the manipulator can escape with a profit.
mitchr4 goes on to explain how the pump and dump scheme works in bitcoin….
In reality the volume is a small group buying and selling to themselves through a bot. They do raise the price quickly, but the frenzy of their volume causes everyday joes to buy, and gives them an escape to dump their coins at double the price. They also continue to buy and sell all the way down the dump to catch more idiots looking for a rebound.
If this is true, the price can and is being manipulated like other markets. The question is until when? When (IF) mass adoption occurs, pump-and-dump schemes could be eliminated.
Check out the r/bitcoin post here