By Market manipulation is viewed as a serious and problematic issue that is resulting in the disruption of the development of the natural market. Institutional investors are experiencing difficulties investing in the market as a result of this issue, with concerns regarding fraud risk and ever-changing cybersecurity threats being among some of the causes. Regulations are required to address this problem in the ever-growing would of cryptocurrencies.
Crypto Markets Said to be Safer Then Stock Markets
The CEO of Binance, Changpeng Zhao states that the crypto market experiences less manipulation than traditional markets as a result of trading occurring within multiple markets. He suggests that traditional markets have many large market makers with close media and insider connections, and trade many instruments in only a single market making them more easily manipulated.
Nevertheless, market manipulation does still exist within the crypto world and remains an unsolved and ever debated issue.
Crypto Markets Fabricate Volumes
The crypto market contains an abundance of problems within it, a prominent one being the falsifying of daily trading volumes by multiple crypto exchanges. This is yet another issue affecting market manipulation. In a report by Sylvain Ribes, an avid trader and investor, it can evidently be seen how numerous exchanges such as OKEx and Huobi issue fake daily trading volume reports. He states that up to 93% of OKEx reported volume is actually non-existent, an exchange rated number 1 when analyzed by said volume.
Sylvain Ribes estimates that over $3 billion of these reported volumes are in fact fictitious. The accuracy of this estimate in its representation of the real situation is unknown; these figures are only what the research was capable of proving,
Some individuals speculate that since the market is not properly regulated, these actions are not in point of fact illegal, while yet others argue that no damage is being done by the exchanges partaking in this practice. However, both these statements carry no truth and false reports do have a major carry-over effect to the entire market.
The representation of fake situations in the markets as shown in these falsified reports provides investors with a skewed idea of the market’s position. New, inexperienced investors are particularly affected by this as these artificial volumes add an element of appeal to cryptocurrencies. Investors purchase coins that, according to claims of the reports, move through exchanges in gigantic numbers each day. In reality, however, the contrary is true and these coins are standing still.
Regardless of all the evidence, the practice of market manipulation remains a largely ignored and unresolved issue. Until a point is reached where something is done to prevent this, the market will continue to be an ever fluctuating and unpredictable entity, with higher levels of stability remaining unachievable.
Follow CoinBeat on Facebook, Twitter & Telegram
Subscribe to our CoinBeat Newsletter
Submit an article to CoinBeat
View live Marketcap Prices here
Comments