Are crypto markets a stage for SCAMS?
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Are crypto markets a stage for SCAMS?
I don't mean to say that the market itself is a Scam. Rather, its own nature and behavior would facilitate the realization of Scams.
This is mainly because the market is manipulable. Yes, the crypto market is totally manipulable.
It only takes a certain capital to enter or leave to alter the price of a cryptocurrency.
I am not referring specifically to BTC or some other of the main cryptos, but to that large number of shitcoins that exist and the new ones that are born every day.
There is an almost indeterminate number of "alt-penny-coins" on the crypto market. Many of them do not get to see the light but for a few hours, even minutes, and then lose all their value and disappear.
The Chinese market is full of them. On a daily basis on Binance, for example, you can follow any recently launched crypto and see its value skyrocket in a matter of minutes and then plummet again.
In those few minutes when the coin makes 10X of its value, anyone can enter believing that it is a good investment or simply to make a scalping-trade. But at the least expected moment we see how an immense red candle is formed that leaves everyone out.
If that is not a SCAM, then I would like to know what it is.
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Modus Operandi
- Create a new token and buy half the supply when the coin is worth nothing.
- Pump it up: There are many options for this. Among them, the use of social networks to create opinion matrices, a comment, a tweet from a recognized figure can cause the necessary effect.
- Massive sale.
With these three steps, many scammers have managed to make money from small investors, who then see how the project in which they believed and invested, becomes a ghost town and the graphics go underground.
There are other forms of Scam in the crypto market. I do not want to delve into this, what I do want to make clear is that the market allows it.
These types of activities cause great damage to the image of the crypto world and further slow down the mass adoption that many of us long for.
@juanmolina
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hello @juanmoliyo,
I think there are two factors that affect the price of coins market is related to scams, the first is the markets are not based on the exchange of products and service, this makes the scammers with a small capital can raise prices and then let these projects abandon leaving millions of people without capital and the second way is with training, This is an industry that is growing and takes advantage of the lack of information of people to sell them training in which they promise them that they will be rich if they learn with them, these are the two big scams in the world of cryptocurrencies.
You've nailed it!
Lack of information and education about the crypto market causes many people to be affected.
Currently, a large number of new users are joining the crypto world every day, and it is discouraging for them that in their first steps they are involved in situations of loss of capital.
Hi @juanmolina
It's an interesting question, talking about scams is complex, but, the particular cases you comment of those coins that pump and then rule profits and let fall, I particularly fell into one some time ago, luckily I didn't invest much.
There are even groups organized to do this kind of things. Unfortunately. And these types of situations are what make some people lose money and end up not going near cryptocurrencies again.
That is what I mean, there are large groups of users, mainly Chinese, who are in charge of pumping certain tokens, then making massive sales and leaving the price on the ground.
Certainly my friend, I think that since there is no project behind a cryptocurrency, it can happen that they list it on an exchange, pump it, then make a profit and sell it massively deceiving those who compared the cryptocurrency at high prices and never see it again at those prices.
The important thing to avoid falling into these scams is to trade known cryptocurrencies, and if they are new cryptocurrencies, at least have a project behind as a swap, or for example as steem that has behind this great platform project where we can invest steem and make steempower.
Greetings my dear friend, let's hope that none of us fall into any of these scams.
Steem has been a consolidated project for years. However, recently created coins are used as a rapid enrichment method. I consider this type of procedure to be dishonest.
On the one hand there are the people who obtain very high profits, but on the other hand we have a large group of users who end up being affected, some in a greater proportion than others.
It is true, when you do tradind you take risk and everyone who does it must be aware of it.
@tipu curate
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Greetings @juanmolina, a very interesting topic, because it is a reality that is lived in the cryptocurrency market, that is why many people distrust the Cryptocurrencies, and do not enter this great world, that is why you should make a comprehensive study when you think to invest in a Cryptocurrency, and not blindly strár, or in very new markets that do not generate much confidence, and less enter with a large capital to a market without good bases, thanks for sharing this topic.
The golden advice is: Never invest on emotional impulse or FOMO. Any investment, large or small, must be preceded by fundamental and technical analysis.
Thanks for reading and commenting.
Hello @juanmolina
I agree.
The problem is that some naive new investors see crypto as a one-way ticket to getting super-rich. This is so wrong and we need the break this idea. As long as greed and ignorance exist, scams will continue to thrive
That is the bad concept that certain people have developed about crypto. They think this is a lottery where they can get the winning ticket.
They are unaware that this is a serious and professional environment that deserves study and dedication.
Thanks for reading and commenting.
Greetings @juanmolina. In any business or economic activity that we can do, we are exposed to be scammed, the important thing is to have full knowledge of the type of risk that we can run to avoid getting hurt, even more in crypto markets, when we already know how volatile they can be.
Thank you very much for sharing your publication
I totally agree with you.
In order to be prepared and recognize any possible scam scenario, we must adduce ourselves, read a lot, do seminars, listen to advice from more prepared people. In this way, we can make a valid analysis.
Thanks for your reply.
I don't think so , if of the project can be scam but not all of the project we need to do our due diligence before investing in any project so that we can be on safe side and our hard earn money will be on safe side.
that's the main key. The previous analysis before any investment.
But this brings us to technical preparation. How can we make a valid analysis if we do not have the necessary education and tools?