In the third article of his informative series, Chris Cousins of Ignite Ratings explains how a cryptocurrency trader today can influence the market… while also staying anonymous
Market manipulation 101:
Spreading rumours, one coffeehouse at a time, was surely a slow way to reach large numbers of traders and it was virtually impossible to remain anonymous.
Today, the clever manipulator has several means of influencing opinion and staying anonymous, which is the danger we see in crypto.
It happens fast, and its the last ones in that end up holding the bag.
Its usually done like this:
Step one: Gain access to a large number of potential investors, as cheaply as possible.
This is achieved easily with various social media tools — especially anonymous platforms.
Simply join a bunch of groups and, appearing to be a influencer, give some good advice and build up trust.
Many ICO marketers exist who are more than happy to take a fee to assist!!!
Regardless of the quality of the ICO itself.
Step two: Scale, make sure the rumour is duplicated over and over to many different groups. Again, achieved by building a network of influencers/manipulators, they usually tend to know each other.
Some traders will surely make money on the pump or dump.
Timothy Sykes built an entire training program around shorting over-hyped penny stocks.
Step three: Time, you must make sure the rumour spreads fast in order to get the pump going and exit.
The longer you wait the higher the risk the lie will be exposed.
In crypto, the most honest ICOs tend to be those that show their cards for a while prior to raising, but they also happen to be those that raise the least – which is a clear issue in the market now.
Step four: FOMO — make sure those that hear the rumour are motivated to act NOW, by limited offer or time sensitivity.
TO THE MOON, limited time offer — 24 hours only…LAMBOS! Whatever.
And its pretty much rinse and repeat, again and again, until you are found out and have to make a new alias, easy enough.
And thats how it goes.
The reality is that we exist in an era where technology should be able to facilitate honest, structured, real time and scaleable investor intelligence.
Quality projects receive the attention they deserve, while the losers should be washed out in the street.
Unfortunately, I can tell you that, in crypto, the more you spend on marketing the better your result will be, this might simply be due to increased awareness, but how can you tell it from manipulation?