The Endless Cycle of Market Manipulation
Market manipulation is getting out of hand again and again. The most bullish news turns into the most devastating dump. Billions are liquidated, and the market hangs by a thread. But just when it looks like we’re headed to Goblin Town, the cycle miraculously uncooks itself.
Is the Market Really Manipulated?
But is the market really manipulated, or are we just blaming others for our poor altcoin choices? Is crypto one big scam, or are we just paranoid? It’s time we got to the bottom of this. My name is Guy—let’s get some answers.
The Reality of Crypto Market Manipulation
Right, let’s cut to the chase. Is the crypto market manipulated? Well, the short answer is yes. And the long answer is hell yes. Asking if the market is manipulated is a bit like asking if crime exists. Fair markets are nothing more than a platonic ideal—like the version of the hamburger you see on TV. If you literally believe that’s what you’re buying into, you’re in for a nasty shock.
Market Manipulation Exists Everywhere
All financial markets are prone to manipulation. As long as some participants have an opportunity to profit from an unfair advantage, manipulation will continue. And manipulation is rife in markets far more mature and tightly regulated than crypto—like equities and FX. The perpetrators include the biggest banks in the world.
The Foreign Exchange Market Example
Don’t believe me? Let’s take foreign exchange as an example. Here’s a story Associated Press ran a few years ago:
“EU Fines Banks Over $1 Billion for Foreign Exchange Cartel”
Yep, EU regulators fined Barclays, JP Morgan, Citigroup, MUFG, and the Royal Bank of Scotland for colluding in the trade of large sums of foreign currency. UBS was a sixth co-conspirator but got off the hook for snitching, which is the only reason we know about this case.
How Deep Does the Corruption Go?
So, we’ve got the world’s biggest banks in group chats looking at the Forex markets with x-ray vision, swapping details of their clients’ buys, sells, stops, targets, and so on. Investigators found that bank employees in charge of spot trading various currencies exchanged plans and sensitive information about current and future orders, prices, and trading activities between 2007 and 2013.
A Systematic Issue
Cases like this give us a glimpse behind the curtain, but there’s much disagreement about how deep the rot really goes. Is market manipulation episodic or systematic? Is it a few bad apples, or is the whole damn apple tree a criminal enterprise?
Still, Barclays, JP Morgan, MUFG, Citi, UBS, and RBS ran a criminal cartel for six years before anyone snitched. I, for one, wouldn’t call that a few bad apples.
Crypto’s Lack of Regulation
If organized crime at this level can persist undisturbed for years in the highly regulated Forex market, why would crypto be any cleaner? Crypto is barely 15 years old and very poorly regulated. In the US, where most of the action happens, there’s still no comprehensive regulatory framework designed for crypto.
SEC’s Hamfisted Approach
As we all know, the previous administration left regulation up to the SEC with disastrous results. The agency’s ham-fisted approach hurt businesses and did nothing to protect the investing public from crypto market manipulation.
The Current Regulatory Landscape
With the change of administration this year, US crypto regulation is once again extremely hands-off. We may see reasonable regulations passed in Congress over the next four years. But until then, the barely tongue-in-cheek consensus is that crime is legal.
Forms of Crypto Market Manipulation
Now, let’s take a look at what crypto market manipulation actually entails. If you’ve seen our previous videos on this topic, you’ll know that manipulation includes:
- Pump and dump schemes
- Rigged token listings
- Faked volume
- Rug pulls
- Insider trading
And well, basically everything in between.
Decentralized Exchange Market Manipulation
You don’t have to look far to find crypto-native market manipulation on-chain. Cheap and fast blockchains like Solana have made it possible for just about anyone to issue their own crypto that can be traded on decentralized exchanges.
Wash Trading
Once your token is tradable on DEXs, you can automate wash trading. Wash trading means insiders trading with each other to generate the illusion of trading volume. The idea is to trick other market participants into thinking that your crypto has some kind of organic momentum behind it.
Insider Trading and Rug Pulls
If you pay off the right influencers, your token might even last for a whole day or more. But when momentum stalls, that’s your cue to exit. You turn the dial on your automated trading program from buy and sell to sell, sell, sell. Once your wallets have exhausted their share of the token supply, you withdraw whatever is left in the liquidity pool, ping the chart, and complete the rug pull.
The Meme Coin Craze and Market Manipulation
Until recently, DEX manipulation was the bottom rung of the crypto market and had little influence on the market as a whole. However, as the meme coin market exploded in 2024, all this changed. Vast sums of money are now involved.
The Trump and Libra Scandals
In the first two months of 2025 alone, individual meme coins made headlines around the world and shook the entire crypto market on more than one occasion. Of course, I’m talking about Trump and Libra—two meme coins that became macro shock events for the crypto market.
The Bigger Picture of Market Manipulation
Now, we can all agree that whales and insiders can manipulate the prices of smaller-cap cryptos. But what about major cryptos like BTC, ETH, SOL, XRP, and BNB? These account for well over $2 trillion in market cap. Can they be manipulated like small-cap cryptos?
The Role of Smart Money
Every time we take a position in the crypto market, we are trading against smart money. They know exactly how we operate, but most of us don’t know how they operate. They manipulate the market to liquidate as many traders as possible.
The Importance of Risk Management
Like other financial markets, the goal in crypto is to stay alive for as long as possible. To do so, it’s helpful to assume that the market is permanently out to get you—even if you don’t literally believe this to be true.
Risk management, skepticism, and caution are indispensable. They may not sound like a recipe for 100x in your portfolio overnight, but that’s okay. This is a marathon, not a sprint.
Final Thoughts
Short-term manipulation is only a problem if you have a short-term time horizon. In the longer term, it’s clear which way crypto is headed, and we’d be wise to adjust our horizons accordingly.
And now, folks, I’d like to hear from you! Let us know just how manipulated the crypto market is in the comments down below. If you got something out of this video, manipulate that like button, liquidate the subscribe button, and ping your notification bell so you don’t miss our next upload.
