Having A Bad Time In Crypto Right Now? You’re Being Manipulated

Remember the heady days of December 2017 and January 2018 when Bitcoin smashed all the way up to $20,000 and everyone lost their minds? Sure you do, you were probably one of the crowd going wild along with the whole market. The market exploded, and while there were some naysayers warning of bubbles, the FOMO (Fear of Missing Out) meant that people in their droves were in a mood to buy, buy, and buy.

Now? Well, it seems like just 6 months later with Bitcoin floundering, many people are in the mood to say bye, bye, bye to crypto after months of watching their portfolio bleed out as nothing much happens.

But here’s the thing: you were being manipulated, and you still are. Now, this isn’t an article about blockchain tech or anything like this: it’s a story of human emotions and how much of an effect they play in the markets – whether those are stock markets or cryptocurrency markets.

One thing the market creates naturally from time to time is manias and crazes (which go on to create bubbles). Sometimes, it doesn’t even really matter what the asset is. In December, it was Bitcoin. Another time it was tulip bulbs. All it takes for the cauldron of speculation to bubble up in a frenzy of buying is a little news.

A development in the company. Perhaps a partnership, or a significant event. It’s unpredictable to know what will set it off exactly, but once the mania takes grip, investors wake up fast and the snap up the stock as fast as they can, eager to catch the ride up.

As a result, the good news is amplified by the actions of everyone in market who acts on it. The swing upward (or downwards) isn’t just a barometer of what people are thinking: it’s also a powerful accelerant. You’re already hardwired to know that long, green lines are amazing – and if you think it’s going to keep going up forever, well…..you’re wrong, but you might think you can hop on the train to the top and hop off – good luck.

Back in December, the media whipped up a storm of news about Bitcoin. But this time, it wasn’t just niche bloggers, YouTubers, and financial advisors who were calling the shots to a small group of dedicated enthusiasts. It was the mainstream media.

Trust me, there’s no juggernaut out there that’s more powerful that these organizations: and depending on how they report, a small market like cryptocurrency can absolutely explode: but it will fall.

Now the market is down again – although still bigger than it was back in September – everyone’s blue. Their buys didn’t work out, their holds are lifeless, and the market is bouncing aimlessly between nowhere and nothing.

All of this is quite normal, and sped up in the cryptosphere. When the chips are down, the FUD comes out (FUD: Fear and Doubt). These toxic buddies pull you down just as much as FOMO pulls you up, yet for their opposites, they are just as manipulative as each other. It’s a collective madness, once again.

People get scared: they invested more than they could afford to lose in a coin, or they’ve got something personal and important riding on it. In other words, they’re irrational actors in a market that should, in theory, act rationally, but is often skewered by the actors acting in what they see as their own best interest (regardless of whether that action is actually so).

It’s all organic, and we all do it. If you invest in cryptocurrency and you are honest with yourself, then you know that you have done the same thing. Maybe just the once. Maybe you fall for it a lot, but you’re getting better. Just know that it’s normal, and if you can fight it, more power to you as a smart investor.

So where does the manipulation come in if these is all just a psychological phenomenon combined with the accelerating and amplifying power of the media? Well, like it or hate it, the unregulated status of crypto at the moment – not to mention the huge purchasing power of Bitcoin for those who bought in early and held – means that powerful and rich whales lurk in the crypto seas.

These whales – so called because they have huge amounts of cryptocurrency and the power to move markets without breaking into much of a sweat – have often been accused of doing just that. Moreover, with their huge cryptogains, they are also in a position to influence the market.

Whether that’s holding prices down so that they can accumulate more of a given currency, or working in a group with other whales to engineer charts that work for them, all of these have been noticed and talked about with suspicion by chart watches. But with little evidence – just knowledge that these guys definitely exist – people remain wary.

So yes, the market’s down, things aren’t great, and you’re probably cursing yourself for a bad decision here or there. But don’t give up! The market only has one way to go in the long-term, and all you need to do is be vigilant against manipulation… and pick the right coins.