Reason Why The Crypto Market Is Down (Part 4)

#4. The manipulation in Market is widespread.

One way for crypto buyers to turn a income is through "pump and dump" schemes. This is cryptocurrency slang for inflating a cryptocurrency’s cost solely to promote it off at its peak.

Pump and dumps are rather convenient to accomplish, specially with smaller market cap cryptocurrencies, due to the fact exchanges have unique ranges of liquidity, which influences how they price their crypto.

Cryptocurrency is, by means of definition, decentralized, which means that no centralized entity like a bank or authorities controls it. As a result, provide and demand determine its price, and supply differs widely between exchanges. If any one buys a lot of one crypto on a smaller exchange, investors on different exchanges will observe and buy the same crypto, triggering a market-wide charge increase.

Larger market cap cryptocurrencies are now not immune to this type of manipulation, either. For example, Bitcoin (BTC) is presently really worth 5 bucks greater on Bittrex than on Coinbase Pro, two giant exchanges.