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What is market manipulation in cryptocurrency?

Market manipulation in cryptocurrency involves artificially influencing prices or trading volume to deceive investors.

Market manipulation in the crypto sphere, explained

In the cryptocurrency space, market manipulation refers to the deliberate use of different deceptive strategies to artificially inflate or deflate the price of cryptocurrencies.

One of the signs of market manipulation includes sudden, unusual price increases or decreases that have nothing to do with important news or trends.

Moreover, persistent anomalies in the market or opaque trading methods may indicate manipulative activity, raising doubts about the market’s integrity among investors and authorities. Also, pump-and-dump schemes are prevalent in the crypto sphere, where a group deliberately inflates the price of a cryptocurrency by disseminating false information to entice buyers, who subsequently sell their holdings at a profit.

Additionally, whale manipulation is a market manipulation technique used by large holders, or whales, to purposefully buy or sell huge sums of a cryptocurrency to manipulate its price. Moreover, spoofing — the practice of placing huge buy or sell orders and then canceling them before they are executed to simulate a false sense of market demand — aims to manipulate the crypto market.

Crypto markets are also impacted by insider trading, which is the practice of people making trades based on secret knowledge.

Americans ‘frustrated’ by financial system inequality, 20% own crypto: Survey

Crypto ownership among U.S. adults has remained steady over the last 12 months, with a large portion seemingly “frustrated” by the one-sided global financial system.

A whopping 80% of American adults believe the financial system favors those with “powerful interests,” while 20% currently own cryptocurrency, a new survey has revealed.

Commissioned by crypto exchange Coinbase, the February online survey of more than 2,000 American adults found that 80% of respondents said the “global financial system unfairly favors powerful interests,” while 67% have called for “major changes” or a “complete overhaul” of the financial system.

*A large portion of respondents are disillusioned with the Global Financial System and want change. Source: Morning Consult*

The survey conducted by business intelligence firm Morning Consult was aimed at examining the perception of the global financial system and how United States adults and crypto investors viewed the future of the crypto market and exchanges.

It found that despite the recent FUD and bad news coming out of the crypto space, 20% of respondents said they still own crypto, and nearly a third plan to buy, sell or trade crypto in the next year.

Morning Consult noted that the numbers have remained consistent each quarter since January 2022, drifting between 17% and 20% over the last 12 months, meaning that recent market turmoil may not have shaken retail investor confidence in crypto in America.

“There is reason to be optimistic about crypto’s future. Universally, Americans are frustrated by the inequality in the financial system and are hungry for change,” wrote Morning Consult, adding:

“Crypto investors and younger cohorts of Americans still believe that crypto is a worthwhile investment in the future that can lead to societal benefits.”

Crypto enthusiasm among younger adults also remains high. The survey found that 36% of Gen Z (born between 1997 to 2013) and 30% of Millennials (born between 1981 and 1996) currently own crypto.

*Younger generations remain optimistic about the future of crypto. Source: Morning Consult*

Minority groups were also found to be more likely to hold a favorable view of crypto and be optimistic about the future of the asset.

“Black and Hispanic adults are significantly more likely than white adults to have a favorable impression of cryptocurrency and are more optimistic that ‘Cryptocurrency and blockchain are the future’ than any other cohort.”

Current crypto investors also remain optimistic about the future, with 65% agreeing that the market’s best days are still ahead, while 76% of crypto investors still believe crypto and blockchain are the future.

Some market commentators believe the next bull run will kick off when China adopts a more favorable view of crypto. However, the survey found that more Americans would be interested in entering the market if exchanges were more trusted and secure.

Among the general population, 67% flagged secure and reliable exchanges as important. In comparison, 91% of crypto investors said a trusted, secure platform is vital to the crypto market.

*Many respondents flagged secure, and reliable crypto exchanges as important. Source: Morning Consult*

“How Americans view the reliability of exchanges largely informs their aspirations of cryptocurrency ownership: if Americans feel exchanges are secure, then they are more likely to invest in crypto in the future,” wrote Morning Consult.

Morning Consult conducted the survey between Feb. 10 and Feb. 14, questioning a national sample of 2,202 American adults as well as an oversample of 500 U.S. cryptocurrency investors.

Top 11 greatest investors of all time

Discover the top 11 greatest investors of all time who have achieved unparalleled success in the financial world.

Learning from the greatest investors of all time can provide valuable insights into successful investment strategies and philosophies. Their success stories and experiences can inspire and guide new investors. Studying their methods can help individuals develop their own investment approach and improve their chances of achieving success in the financial world.

Here are the top 11 investors of all time. Learn about the investment strategies and philosophies that have made these individuals some of the most successful investors in history.

Warren Buffett

Warren Buffett, chairman and CEO of Berkshire Hathaway, is known as the “Oracle of Omaha,” has a net worth of over $108 billion, and is widely considered the most successful investor of the 20th century, with a long-term, value investing approach. Being a value investor means that he looks for companies that are undervalued by the market.

Buffett believes in keeping onto his investments for a long time since he is a long-term investor. He has famously said, “Our favorite holding period is forever.” He looks for companies with a “moat, which is a sustainable competitive advantage that makes it difficult for other companies to compete.

George Soros

Founder of Soros Fund Management, known for his aggressive currency speculation and “breaking the Bank of England” trade in 1992, Soros has a net worth of $8.6 billion and is known for his philanthropic work and political activism.

Reflexivity, which is the notion that market conditions are influenced by both subjective perceptions and interpretations of that reality as well as by actual fact, is one of Soros’ key investment principles. This means that biases and cognitive limitations among market players may skew how they perceive the market, creating feedback loops that may intensify current market trends. According to Soros, investors can better predict and profit from market swings by understanding the reflexive nature of markets.

Additionally, he promotes the concept of “margin of safety,” which holds that investors should only buy assets that are substantially undervalued in comparison to their real value. This reduces the possibility of substantial losses for investors, especially in the face of unforeseen circumstances or market unrest.

Peter Lynch

Former manager of the Fidelity Magellan Fund, Lynch is widely regarded as one of the most successful mutual fund managers of all time, with an annualized return of 29.2% from 1977 to 1990.

One of Peter Lynch’s key investment principles is to “invest in what you know.” Lynch believes that because individuals can spot investment possibilities in their daily lives, individual investors have an advantage over institutional ones. Individual investors might spot prospective investment possibilities that others might pass up by keeping an eye on the businesses and products they use and are familiar with.

Benjamin Graham

Known as the “father of value investing,” Graham authored the seminal investment book, The Intelligent Investor, and mentored Warren Buffett.

Value investing, which entails purchasing stocks that are currently trading at a discount to their intrinsic value, is the cornerstone of Graham’s investment philosophy. Graham thought that rather than paying attention to short-term market fluctuations, investors should concentrate on a company’s fundamentals, such as its management, financials and competitive position.

John Paulson

John Paulson, founder of Paulson & Co., is known for his $15-billion bet against the U.S. housing market in 2007, which netted him $4 billion and went down as one of the largest trades in financial history.

Paulson is a hedge fund manager known for his investment philosophy of making concentrated bets on macroeconomic trends. He believes in using in-depth research to identify mispricings in the market and using derivatives to amplify returns. He also focuses on investing in undervalued companies with strong fundamentals.

Ray Dalio

The founder of Bridgewater Associates, Ray Dalio is the head of one of the world’s largest hedge funds and is known for his “Principles” approach to management, which has been adopted by many successful investors and businesses.

Dalio is a hedge fund manager known for his investment philosophy of “radical transparency” and “principles-based” decision-making. He supports fostering an environment in which everyone is encouraged to express their ideas and opinions in an open and honest manner. To make better decisions in the future, Dalio also thinks that a set of guiding principles should be established. His investment strategy is centered on macroeconomic trend identification, risk management and diversification.

Carl Icahn

Founder of Icahn Enterprises and known for his activist investing approach, Carl Icahn has made significant investments in companies such as TWA, Texaco and Blockbuster and has a net worth of over $16 billion.

Icahn’s investment philosophy involves taking large stakes in undervalued companies and using his influence as a shareholder to push for changes that will unlock value for investors. He is known for his aggressive style and willingness to engage in proxy battles to push for changes in company management and strategy.

Jesse Livermore

Considered a pioneer in technical analysis, Jesse Livermore is known for his successful bets on the 1929 stock market crash and the 1907 Panic.

Livermore’s approach to investing included placing bets based on market movements, utilizing technical analysis to spot market trends, and adhering to tight risk management guidelines. He had a reputation for being able to predict market changes and place successful transactions based on his analyses.

David Einhorn

Founder of Greenlight Capital and known for his short-selling approach and successful bets against Lehman Brothers and Allied Capital, David Einhorn has a net worth of over $1 billion.

Einhorn’s investment style involves finding mispricings in the market through in-depth research and using a value-oriented approach to investing. He is known for his ability to identify companies with undervalued assets or growth potential and take a long-term perspective on his investments.

Jim Simons

Founder of Renaissance Technologies and known for his use of quantitative trading strategies, Jim Simons has a net worth of over $25 billion and is a prominent philanthropist. Simons’ investment strategy involves using mathematical models and quantitative analysis to identify patterns and generate trading signals.

Philip Fisher

Known for his “scuttlebutt” approach to investing, Fisher authored the influential investment book Common Stocks and Uncommon Profits and mentored many successful investors, including Warren Buffett.

He believed that the ideal way to find businesses with long-term growth possibilities is to perform an in-depth study of their management, industry position and competitive advantages. Fisher also underlined the value of making investments in businesses that have a strong focus on innovation and research and development.

Binance CEO urges crypto buyers to ‘hold’ amid ‘unpredictableness’

Binance CEO Changpeng Zhao (CZ) said people should invest in crypto if they’re using “cash that you don’t need for a long time” as the market sees high volatility amid FTX’s fallout.

Binance CEO Changpeng “CZ” Zhao has strongly advised cash-strapped and inexperienced investors to stay away from trading cryptocurrencies amid extreme market volatility and unpredictability.

On a Nov. 14 Zhao-led “Ask Me Anything” Twitter space hosted by Binance the CEO suggested that unsophisticated investors wait out the turbulent period instead of risking money needed for living expenses:

“You should not invest in crypto if you’re using money that you need for next week or next month, you should only be using discretionary cash that you don’t need for a long time, like maybe a couple of years.”

For those who do have that spare cash, Zhao advised inexperienced investors and traders to think twice before deploying capital into the market in the near future:

“If you don’t know what’s going on, don’t try to guess what’s going to happen. It’s very hard to predict. So we will go through a period of high volatility and unpredictableness.”

“So unless you’re very experienced, very mature, very confident, and can handle the risk, I would recommend most people just hold for this period of time,” he added.

The spike in market volatility comes as the FTX crisis has had a negative effect on the whole industry — particularly a number of centralized exchanges that have had to temporarily halt withdrawals.

But Zhao confirmed that no such issues exist at Binance. When asked why users should maintain trust in the exchange, he pointed to the company’s balance sheet:

“We don’t have loans. We don’t have debt. We don’t owe anybody any money. We also did not give loans out of the platform. So we never take user assets and give it to a third party to manage and try to make yields.”

Zhao confirmed Binance experienced withdrawals following the FTX collapse and several other events that led to a fall in community trust for centralized exchanges.

He iterated that even in the event that Binance collapsed the platform still wouldn’t block its users from withdrawing their funds.

“If everybody withdraws their funds from the centralized exchange, we’ll just shut down the centralized exchange. We have many other profitable businesses that we have,” he said.

Zhao thinks such an event is entirely possible too, stating that once decentralized finance (DeFi) applications become mainstream centralized exchanges may no longer be necessary:

“If we can have a way to allow people to hold their own assets in their own custody securely and easily, that 99% of the general population can do it, centralized exchanges will not exist or probably don’t need to exist, which is great.”

While the Binance exchange itself is centralized, Zhao emphasized that the company’s investment partners include both centralized exchanges and decentralized protocols to provide users with choices and support entrepreneurs to build.

“We’re technology agnostic. We’re not trying to centralize everything. We’re not trying to bring everybody onto the centralized exchange. If you’re good enough to use a decentralized exchange, go for it.”

Binance CEO urges crypto buyers to ‘hold’ amid ‘unpredictableness’

Binance CEO Changpeng Zhao said people should invest in crypto if they’re using “cash that you don’t need for a long time,” as the market sees high volatility amid FTX’s fallout.

Binance CEO Changpeng “CZ” Zhao has strongly advised cash-strapped and inexperienced investors to stay away from trading cryptocurrencies amid extreme market volatility and unpredictability.

On a Nov. 14 Zhao-led Ask Me Anything Twitter space, hosted by Binance, the CEO suggested that unsophisticated investors wait out the turbulent period instead of risking money needed for living expenses:

“You should not invest in crypto if you’re using money that you need for next week or next month, you should only be using discretionary cash that you don’t need for a long time, like maybe a couple of years.”

For those who do have that spare cash, Zhao advised inexperienced investors and traders to think twice before deploying capital into the market in the near future:

“If you don’t know what’s going on, don’t try to guess what’s going to happen. It’s very hard to predict. So we will go through a period of high volatility and unpredictableness.”

“So unless you’re very experienced, very mature, very confident, and can handle the risk, I would recommend most people just hold for this period of time,” he added.

But, Zhao confirmed that no such issues exist at Binance. When asked why users should maintain trust in the exchange, he pointed to the company’s balance sheet:

“We don’t have loans. We don’t have debt. We don’t owe anybody any money. We also did not give loans out of the platform. So we never take user assets and give it to a third party to manage and try to make yields.”

Zhao confirmed Binance experienced withdrawals following the FTX collapse and several other events that led to a fall in community trust for centralized exchanges.

He iterated that even in the event that Binance collapsed the platform still wouldn’t block its users from withdrawing their funds.

“If everybody withdraws their funds from the centralized exchange, we’ll just shut down the centralized exchange. We have many other profitable businesses that we have,” he said.

Zhao thinks such an event is entirely possible too, stating that once decentralized finance (DeFi) applications become mainstream centralized exchanges may no longer be necessary:

“If we can have a way to allow people to hold their own assets in their own custody securely and easily, that 99% of the general population can do it, centralized exchanges will not exist or probably don’t need to exist, which is great.”

Investors are loving SEC’s crypto industry crackdown: Survey

Critics have called out the SEC’s “regulation by enforcement” tactics, but to some investors, it’s a positive sign they’re seeing to invest in digital assets.

The United States Securities and Exchange Commission’s (SEC’s) more-than-enthusiastic crackdown on the crypto industry is being seen as a positive signal for the majority of crypto investors, according to a new survey.

Around 60% of 564 survey respondents in the latest MLIV Pulse survey from Bloomberg said they viewed the recent flurry of crypto crackdowns as a positive sign for investing in the asset class.

Around 65% of retail investors signaled they were “more likely” to invest with “greater enforcement against crypto” compared to 56% of professional investors.

Conversely, only 35% of retail and 44% of professional investors said they would be “less likely” to invest as a result of more enforcement action.

The U.S. SEC has stepped up its actions over the past months, with high-profile investigations of bankrupt crypto companies Celsius Network and Three Arrows Capital, along with a reported probe into Yuga Labs and the wider nonfungible token (NFT) space.

It also famously fined reality television star Kim Kardashian to the tune of $1.26 million for promoting the EthereumMAX cryptocurrency without proper disclosures.

The investor sentiment appears to run in contrast to many U.S. lawmakers and crypto industry participants, who have repeatedly criticized the SEC for taking what they call a “regulation by enforcement” approach to cryptocurrencies.

Gurbir Grewal, the SEC’s enforcement director, said in September it will investigate crypto firms regardless of the narrative that it’s “stifling innovation.”

The SEC has also boosted its ability to handle specialized issuer filings by adding an Office of Crypto Assets in September, purely focused on dealing with crypto asset applications and services.

Despite the interest gained from investors by the crypto crackdowns, the market conditions have seen many major cryptocurrencies sit within a tight price band for months and around 43% of survey respondents said they would increase their crypto exposure over the next 12 months.

Downfall of Canada’s Lambo-driving ‘Crypto King’ reportedly sees $35M in losses

The founder of a fraud recovery law firm says the only other avenue available for investors would be to make reports to the Ontario Securities Commission or the police.

A self-described 23-year-old “Crypto King” is facing a raft of demands among 140 of his investors as they try to claw back a collective total of $35 million from his company AP Private Equity Limited.

According to a Tuesday CBC report, creditors are hard at work trying to unravel where all the money ended up that they allegedly gave Canadian Aiden Pleterski to make crypto and foreign exchange investments on their behalf.

A bankruptcy trustee’s report, creditors meeting minutes, court filings and complaints made to Investigation Counsel PC reveal Pleterski owned 11 vehicles, leased four other luxury cars, regularly flew on private jets and was living in a lakefront mansion that was $45,000 a month to rent.

So far, roughly $2 million worth of assets have been seized, among them two McLarens, two BMWs and a Lamborghini.

Norman Groot, the founder of Investigation Counsel PC — a fraud recovery law firm — claimed the “large lifestyle burn rate” still doesn’t “account for the amount of money that’s missing.”

An initial lawsuit brought against Pleterski resulted in his assets and bank accounts being frozen, but that has now been superseded by bankruptcy proceedings. At this stage, it is the only recovery process for investors because bankruptcy proceedings take precedence over civil claims.

Groot said that “the only other avenue available for investors would be to make reports to the Ontario Securities Commission and the police.”

“Those processes are lengthy,” he said adding, “The more time that goes by, the less likely there’s a recovery of evidence and less likely there’s a recovery of money.”

Groot said the warning signs for investors of excessively high returns were there for all to see, stating:

“Five per cent interest [a week] is not available on the open market. A 23-year-old kid is unlikely to be the next Bill Gates — talk to somebody who is conservative and get a second opinion.”

Creditor Diane Moore invested $60,000 and said her investment contract gave her the lion’s share of a 70-30 split on any capital gains, which were targeted at 10 to 20 percent biweekly.

“The whole thing was based on trust,” she said, claiming to be out of pocket $50,000.

Pleterski’s lawyer Micheal Simaan has disputed the allegations and said his client has been cooperating fully with the bankruptcy process.

According to Simaan, his client started investing in crypto as a teen. His success during the bull markets prompted others to offer cash freely for investments in the hopes of striking it rich.

“Shockingly, it seems that nobody bothered to consider what would happen if the cryptocurrency market plummeted or whether Aiden, as a very young man, was qualified to handle these types of investments.”

Pleterski claimed his investment company ran into trouble thanks to “a series of margin calls and bad trades,” possibly exacerbated by the market crash and ongoing crypto winter.

He said that all the money fronted by investors in late 2021 and early 2022 is gone.

The trustee noted that they still needed to receive supporting evidence of the trades after requesting proof of transactions and bank statements.

One-third of estimated 115M Indian crypto users concerned about regulations

A KuCoin survey estimates that some 115 million Indian citizens are invested in cryptocurrencies, while many are still concerned about the government’s stance toward the sector.

India is now home to an estimated 115 million cryptocurrency investors despite a historically negative attitude toward the sector from the government, according to new data.

The latest gauge on the number of users in India comes from cryptocurrency exchange KuCoin, which released the findings of its ‘Into The Cryptoverse India Report’ survey on Tuesday. The estimated 115 million crypto users represent around 15% of the Indian population aged between 18 and 60.

A key highlight was the 33% of survey takers concerned by ambiguous government regulations that could deter potential investors. Security concerns were also evident, with 26% worried about hacks and exploits while 23% were concerned about losing funds in the event of a security incident.

The report is based on a sample of 2042 Indian adults aged between 18 and 60 who were polled between October 2021 and June 2022. 1541 respondents identified themselves as cryptocurrency investors who either own crypto or have traded over the past six months and intend to continue doing so.

Barriers to continued adoption and onboarding of new users are wide-ranging, with education, regulatory and security considerations as chief concerns for citizens in the country. 41% of respondents admitted not being sure what type of cryptocurrencies to invest in, while 37% found it difficult to manage the risk of portfolios. A further 21% of respondents had little knowledge of how cryptocurrencies work.

A growing section of India’s cryptocurrency users is younger than 30, with 39% of investors aged between 18 and 30 identified in the first quarter of 2022. Investing for the future also emerged as a prominent theme, with 54% of respondents seeing the potential for cryptocurrencies to provide a higher return on investment than conventional assets.

Cointelegraph reached out to KuCoin CEO Jonny Lyu to unpack the findings of their India report, who admitted that the number of crypto users in the country was a “confirmation of expectations.” Given that India is the most populous country in the world with a rapidly developing middle class that is tech savvy, Lyu expected to see a proportionally strong layer of investors engaged in cryptocurrencies:

“Despite the government’s stance affecting local crypto market sentiment, people still continue exhibiting interest in new means of value accumulation and accrual.”

Lyu also noted that regulatory concerns were not the be-all and end-all of the future adoption of cryptocurrencies in the country, suggesting that it was just one factor affecting the rate of new users in the space.

The KuCoin CEO also suggested that India’s vast population merely needs to be informed about the potential use cases of cryptocurrencies and their underlying technology in order for mass adoption to take place:

“The problem is the lack of overall awareness about the potential of cryptocurrencies. The situation may change as more Indians become aware of cryptocurrencies and sufficiently strong projects are introduced that can inject them into mass usage with accompanying informational support.”

KuCoin’s India report paints a positive picture of the growth of cryptocurrency adoption in India, but the apparent disparity in its government’s stance toward the sector continues to be a hindrance. A 30% tax on unrealized crypto gains was instituted in April 2022, which met widespread criticism, while users are also subjected to a 1% tax per transaction.

The effect of this new law was felt with data from exchanges in India showing a massive slump in transaction volumes in the wake of the tax laws enforced on cryptocurrency trading.