The dark side of cryptocurrency: understanding of market manipulation
Cryptocurrencies such as Bitcoin and Ethereum have shocked the world with rapid growth and growing adoption. However, as they become more frequent, concerns are increased by the possibility of the manipulation market. In this article, we will dive into the cryptocurrency world and explore how the market manipulation can affect its ecosystem.
What is the market manipulation?
Market processing refers to deliberate and systematic attempts to influence security or asset price by artificially creating false or misleading market data. This can be done with a variety of means including:
* Price Platform : Price effort or artificial challenge to create a false value.
* Pump and discharge charts 
: Treat prices to increase demand, then sell active profits that make others buy from fear or greed.
* OUF by market : Creating false orders to manipulate the market and influence its management.
Cryptocurrency role in market manipulation
Cryptocurrencies are particularly vulnerable to the market manipulation due to their decentralized nature. Unlike traditional assets, such as actions or liabilities, cryptocurrencies operate in a network of peers without a central authority or administrative authority. This means that anyone with an internet connection can create and exchange cryptocurrency, creating a complex network of market participants.
Why cryptocurrency is most likely to manipulate
Several factors make cryptocurrencies more sensitive to manipulation:
* Decentralization : The decentralized nature of cryptocurrencies makes it difficult for the authorities to interfere or regulate the market.
* Limited Regulation : Unlike traditional markets, cryptocurrencies lack effective adjustment and monitoring that facilitates non -skilled market manipulators.
* Trade at high speed : Cryptocurrency stock exchanges and markets in real time can manage a large amount of transactions, creating an environment that promotes manipulation.
Market Manipulation Examples in cryptocurrency
Several significant examples illustrate the risks related to the processing of the cryptocurrency market:
* Bitcoin (BTC) Pumps and Dump Scheme : In 2017, an individual group organized a pump and a massive discharge diagram to artificially inflate the BTC price. The diet included the creation of false buying activities to raise prices.
* Ethereum (ETH) Manipulation of the market : In 2020, the algorithmic commercial company was accused of manipulation of the ETH price, creating and fulfilling complex professions to influence its management.
Market Manipulation effects
The consequences of manipulation of cryptocurrency market can be serious:
* Financial loss : Investors who buy a false or manipulated price can deal with significant financial losses.
* Systemic Risk : A large -scale market processing can have a systematic impact that affects the overall stability of the cryptocurrency ecosystem.
* Economic instability : Prices for cryptocurrency prices can also lead to economic instability as investors and traders are becoming increasingly sensitive to price movements.
Market weakening management
Regulators and market participants need to work together to create the market for cryptocurrency manipulation to create effective rules and monitoring mechanisms:
* Legislation : Governments should develop a stable regulatory framework that creates the unique challenges of cryptocurrencies.
* In opposite (AML) and know-you customer (KYC) : Crypto-money exchange and merchants must implement LAA and durable KYC measures to prevent illegal activities.
* Supervision and Message : Market participants should be reported to any suspicious activity or attempts to manipulate.