The Hidden Ways Crypto Market Is Manipulated

Filled with scams, pump and dumps. Criminal cryptocurrency scams are on the rise in Canada with millions lost insider tradings. Whales.

Welcome to the wild adventurous world of the crypto market.

Crypto investors lost $54 million.

This man is the victim of a cryptocurrency investment scam. Although adventurous, this space is still dark and mysterious and open to a lot of manipulation tactics that these scammers using.

Getting more and more sophisticated. It's all a lie.

I will tell you every single way the market is being manipulated. Some of it you may know, some of them you may not. But I'm going to show you so you can protect yourself from it and navigate around this market manipulation that happens in crypto. Do you know the tricks influencers play to manipulate the market? Do you know the ability that VCs have to manipulate the market by buying tokens at a cheaper rate before you and I get access? Do you know how whales congregate together to manipulate the price of bitcoin? Did you know, according to the court cases that Sam Bankman Fried, the founder of ftx, conspired against the rest of the market to manipulate the crypto market using customer funds that he had in his platform.

Former crypto billionaire Sam Bankman Fried has been found guilty of defrauding his customers billions of dollars through his now banked.

Up cryptocurrency exchange, one of the biggest financial frauds in history.

The Southern District of New York has confirmed the of FTX founder Sam Bankman Fried, the once crowned king of crypto.

Now adorned in handcuffs. I'm going to tackle all of these forms of manipulation so you can protect yourself. The first one I want to tackle is influencer manipulation. This is the biggest I've been caught out following bad advice and bad information, listening to people, the experts and the gurus that actually have no idea what they're doing. Have you ever wondered why these people even make content in the first place? If they were so good at what they did, why are they out there talking about crypto themselves? Now I don't want to make a blanket statement because they're actually are some great influencers and heck I'm doing YouTube content. But there is a very large percentage of influencers that are great entertainers and are great at hooking you in, but are very poor at actually giving quality information. And you can be manipulated by listening to these people, especially those that form this cult like following. So many crypto influencers on YouTube are being paid to promote the assets and altcoins they're speaking about. And we've seen this with investigative Twitter people following and tracking the data of blockchain addresses connected to YouTubers and the tokens that they're promoting. Some of the biggest crypto YouTubers in the space have been found out for promoting tokens that they've been paid to promote without disclosing it. And this pains me and makes my blood boil thinking about how many people will follow this information. The worst point of this is for so many of these tokens, they're very low market cap. And the token supply and token economics are heavily in favor of the people that built the project and are advertising it, not the retail investors. So you and I continue to follow this information and get screwed because of it. Even worse than this are influencers that pump the token and then sell their tokens into their audience. And this happens more often than not. I've spoken to so many investors that have followed these influencers blindly, trusting these people buying into the tokens that are now down 80, 90% with no hope of coming back. And I've lost tens of thousands, if not hundreds of thousands of dollars from this advice. And the only person that's winning, the only person that has won out of this transaction is the influencer. Please, please be careful about following people online. The next one is VC firms. And this makes my blood boil. It's actually disgusting to think about how this actually new crypto projects are looking to raise money. They need money to fuel their business. They'll go to a VC firm and offer insanely low token prices for their VCs to get into. When we were raising money for Collective Shift, I spoke to so many investors that would literally only buy into tokens that had instant liquidity and that were lower that the retail investors were going to get access to. This is the VC model. They buy a low cap altcoin at a lower price than retail investors. They get a three to six month lockup period, meaning they can't sell their tokens for three to six months. They get their token, the project lists on an exchange, or it gets launched at a higher price than what the VCs got access to. Their tokens will become unlocked and all of those tokens coming onto an exchange to be bought are bought by retail investors at a higher price than what the VCs bought into, meaning the VCs get an instant 2, 3, 5, 10x and the retail investors are buying at that high price. What happens then is the market dumps because the VCs are selling all their Tokens into the retail investors and retail investors instantly get burnt. And that is the VC model. The VC makes all the money, the retail investors get burned. Now that is one of the worst cases for VCs in the space. VCs have a pivotal role in crypto. I don't want to blanket all VCs and not all VCs do that. And they are required in this space to actually fuel and grow a lot of these companies. We were backed by a VC company, so I don't want to blame all the VC companies. But you just need to be aware of the market manipulation going on if you're buying into some of these early stage tokens. Because I've seen so much, this cycle repeats and retail investors get burnt. So please be careful. Another form of manipulation is wash trading. This is where there's fake volumes and fake trading of capital that's just happening. It's like me buying and selling myself. So you could look at a token that has $100,000 of 24 hour volume, but it doesn't mean me and you are trading that between each other. I could just be trading that myself. Manipulating the amount of volume, manipulating the amount of perceived interest in that token. This happens most commonly on centralized exchanges and the SEC have cracked down hard on Binance for example, on this. For this perceived WASH trading. A data scientist from Dragonfly Capital found in January 2020, 80% of the total NFT trading volume was actually wash traded and in 2022 it averaged around 58%. This is a huge amount of wash trading. So a lot of the on chain activity that's actually happening is actually fake. So please be careful of this. The next is whales and social media. I've seen these whale groups, these telegram groups of huge traders with huge social media followings will come together to expose news or come out with a new narrative at a similar time and front run the market. Basically what happens is they'll put out something and they'll counter trade what they've just all put out at the same time. Some of this happen over in China, some of this happens online on Twitter. It happens less now in a less volatile market. But in bull markets when the market caps where we are right now are quite low, it is easy to manipulate. The more money you have, the easier it is for you to manipulate the markets. And the last one is fake news. We see this quite often, especially coming out of different countries where they push fake news. Even we see with JP Morgan, I wouldn't call it fake news necessarily, but they put out these posts where they're not interested in crypto. Bitcoin's worthless and yet a few months later, now they're all in on bitcoin and they're they're buying crypto. Please be careful of fake news and reading stuff that may not be true. So how do you avoid these types of manipulation? To avoid manipulation, look out for these two things. One is token supply. For a lot of tokens they have these outrageous token economics where they have a very little amount of supply out in the market and a lot more to come, meaning they're going to flood the market. The other one is the token vesting schedule. You can look on things like Defi llama or token unlocks to see exactly when they're released and who holds the supply. This will give you a good indication of who gets access to what tokens and when they're going to be released to the market. Some of these have outrageous token vesting schedules with the VC getting early access and very short token vesting schedules, which means they can just basically dump on the market. So be aware of that. To avoid project manipulation, look out for official announcements and partnerships with reputable sources and companies as well. Take influencer promotion with a huge grain of salt. If I see any influencer promote a token, it's a big red flag unless they're super transparent that they're involved with the project. If they're promoting something, usually there might be some sort of incentive behind closed doors as I mentioned. So please, please be careful. So these are some ways that the crypto markets can be and be manipulated and it will be like this for a little while until we get more mature and probably go through this next cycle. Just remember those red flags are the things I spoke about to help you navigate it through as we grow as a crypto market. As we go through this next four year cycle, I fully expect the markets to not be manipulated as much. But because of the cycles and because of how small the market caps are, it is easy for these people to push the market around. For more videos to help you educate yourself, check out the other YouTube videos I've created. I'm new to YouTube so hopefully these have been helpful for you. I have been doing this for a long time and I'm just sharing my experiences to help you win in crypto and make the most of this upcoming four year cycle. Thanks so much. Leave a comment if you have any other video ideas. Otherwise I'll see you on the next video.