The rise of digital assets and their introduction to the wider consumer base has bourne numerous exchanges that serve the interests of brokers, custodians, and proprietary asset holders as primary marketplaces. As a Forbes.com investigation puts it, more than half of the ICOs commenced in 2017 are now defunct which tells us the inherent properties of these digital-money backed offerings and trading volumes across exchanges. With the flourishing number of digital assets and the need to make hefty profits, whales are constantly influencing and exploiting the markets for vested interests. The only thing that can outlive these instances of fraudulent activities is perhaps strict regulatory measures which are just on paper and no application of it is widely practised.
This paper by The U.S. Commodity Futures Trading Commission (CFTC), states that even experienced crypto traders and investors can become the targets of fraudsters through pump-and-dump schemes and HYIP programs. The scams and manipulations are old but are masked underneath the newfound crypto technology.
Let us dig down and find some answers related to the manipulation aspects into play.
Insider Trading
Insider trading is an activity facilitated by privileged information surrounding a specific project or a coin offering undertaking. It is essentially an aspect wherein an insider person or entity obtains what would be the material, nonpublic information and trades to manipulate prices and put the crypto volatility as a tool for making big gains. In general, the law forbids the sharing of vital information, prohibits trading at the expense of unsuspecting traders, or leverage sensitive financial information related to a coin, but in this case, insider trading cause losses the penetrate the global markets.
In a similar article, we talked about how can one flag a shady investment project that is blacked by nothing but fake exchange volumes and promises that remain undelivered. We urge readers to give it a shot to understand the various ways you can steer clear of these invaluable investment channels in the form of worthless digital assets.
Market manipulation
Cryptocurrencies, no doubt, have replaced the need for banks to monitor and record transactions. But unlike the stock markets, the nascent crypto markets are prone to ever-increasing asset theft and market manipulation. This phenomenon works by manipulating the natural price of an asset for inducing unrest among the interested users, traders and investors. The inherent nature of digital currency may be decentralized and trustworthy, but exchanges and whales have somewhat diminished that attribute of cryptocurrencies.
In another story, we stated the 5 most defining factors in crypto markets and how do they affect your crypto trades and investment. Readers will get a crisp understanding of the various ways a market may be manipulated all of which prove fatal to your crypto assets committed to a trading/purchasing order.
TradeDOG’s approach
The increasing number of altcoins have made it impossible for the retail-investor to assess the risks, rewards and merits before executing investments. A proper prior due-diligence structure demands time and patience and relies on the points mentioned below-
- independent research reports
- proper disclosure
- data misuse controls, to prevent insider dealing;
- independent rating agencies.
- Governance and transparency
TradeDOG’s crypto analysts take numerous measures to vet digital assets before advising users to initiate trades and investments. Some of the fundamental parameters for rigorous due-diligence include:
Analyzing the listing process framework of exchanges
AML compliance
Listing requirements and considerations
Token issuer business
Token issuer team
Token issuer governance
Technology
Token supply and liquidity
Token demand
Token sale structure
Regulatory measures
Reputational risks
Swot analysis
Listing fees
Utility
All the aforementioned parameters are crucial in determining the worth of a crypto asset and reveals its sustainability in the long run. We ensure that our in-depth reports and market research are up to the global standards and reach grade-A verification levels so that anyone interested in the specific coin can take action on a priorly-evaluated, risk-controlled vetting framework.
Make sure you take a look at our fundamental research reports such as Matic Network, Coti, chainlink etc. Market insights, Newsletters and social updates by tradeDOG are also a great idea to keep a track of your favourite coin’s liquidity, market sustenance and overall worth.
Conclusion
In a looming crypto volatility event and market manipulation, even the crypto trading purists withhold their moves and reconsider their strategies to prevent losses. When you are navigating the crypto markets affected with fomo, and get-rich-quick schemes, your assets are definitely on the line. Managing risks and spotting fake volumes gets increasingly important. With TradeDOG, users can leverage our market understanding and due diligence to enter crypto trading with relative ease. In the next article of this series, we are going to talk about Insider trading, its examples and repercussions on the entire crypto markets.
Visit tradeDOG to uncover our critical examination of potential digital assets to identify potential market opportunities that will not only secure your investments but also make you an advanced crypto trader.
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