Dark side of cryptocurrency: The role of negotiation in market handling
Cryptic currencies such as Bitcoin and Ethereum have gained tremendous popularity in recent years, and their prices vary considerably depending on the sense of the market. However, in the midst of exaggeration and speculation around these digital funds, the darker side of the encryption currency market has created. Market manipulation, a kind of privileged information that utilizes price differences from the activities of others, is increasingly linked to large amounts of commercial activities.
What is the market manipulation of the market?
Market manipulation refers to any activity or strategy that artificially affects the price of security, such as property, to manipulate market. This can be done through various media, including the dissemination of false information, to the use of internal information or other forms of market technology.
The role of negotiations in market handling
The number of negotiations is often mentioned as one of the key indicators that should not be relying on investment decisions. However, the increasing research body suggests that the commercial amount can also be used to identify potential manipulation of the market. Here is like:
- Confirmation deviation
: When merchants depend solely on high volumes, including a small number of operations that also indicate the price movement can also ignore. This creates a «Eco Chamber» effect, where most stores are strengthened and confirms the idea that there is no trend or pattern.
- Adding noise : Commercial amount can cause an increase in noise activation that can be used to strengthen false signals and create artificial prices. For example, if a small group of merchants buy large quantities of bitcoin, their operation may trigger a speculative vimp, leading to a rapid price increase.
- Ponzi systems: A large amount of commercial activities can also be used as a red flag for ponzi or other market manipulation. If the purchasing power of the operator grows rapidly, it may indicate that they use the funds of new investors to support their own activities.
Case Studies: Crying Currency Market Handling
Several cases of high -profile cases have emphasized the role of negotiation in the cryptocurrency market handle:
* COINBASE : In 2019, a study by the New York Minister of Justice found that Coinbase had not revealed millions of dollars at unreported events and internal information. The company was charged with a large number of Bitcoin and other cryptocurrency prices through a large number of operations.
* Binance : In 2020 it was revealed that Binance, one of the world’s largest encryption currency exchange, had used the complex commercial volume manipulation system to artificially supplement the prices of some funds. This included the use of false or manipulated market information to increase the price of certain currencies.
conclusion
The relationship between commercial quantity and market manipulation is complex and diverse. Although high volume can be used as a signal, they should not rely on those investment decisions. The use of the number of negotiations in market handling emphasizes the need for control and openness in the cryptocurrency market.
Regulatory authorities, investors and merchants must work together to find and prevent market manipulation. This includes:
- Improved distribution requirements : Regulatory authorities may require exchanges and other market parties to distribute additional information about their commercial activities.
- Increased transparency : Investors should be encouraged to use several sources of information in their investment decisions.
- Regulation control : Governments and regulatory bodies can provide control and application to prevent market manipulation.