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posted by janrinok on Thursday January 19 2023, @09:46AM   Printer-friendly
from the we-won't-get-fooled-again dept.

Whenever you see cryptocurrency prices suddenly rise, that's probably why:

We're not just a couple of weeks into 2023 and crypto prices are spiking. Seeing number go up might entice you to throw some money into Bitcoin or Ethereum. After all, maybe this is the beginning of another crypto bull market? You wouldn't want to miss out!

Well, just wait a minute. Consider this first: Why are crypto prices suddenly rising?

There are plenty of analysts out there trying to make logical sense of the recent bump in cryptocurrencies value – inflation is slowing, belief that the Federal Reserve is done with hiking interest rate hiking, bullish news on crypto – but no, that's not really it.

There's been no big positive news in the industry. There aren't reports of some new, mainstream avenues of adoption. Sure, the stock market is up a bit right now in the new year, but not at the same level cryptocurrency is.

So, what's going on here? Market manipulation.

[...] As longtime cryptocurrency writer and critic David Gerard explains: The big players in the industry are "buying" in order to control the market.

"The bitcoin price is whatever the large players need it to be," writes Gerard. "The market is very thin and trivially manipulable with the billions of pseudo-dollars in unbacked stablecoins on the unregulated offshore exchanges. The price needs to be high enough so the big boys' loans don't get liquidated; but it needs to be low enough so that the bagholders don't attempt to cash out."

John Reed Stark, a former SEC official, concurred with Gerard's assessment.

"​​A recent Forbes analysis of 157 crypto exchanges found that 51 percent of daily bitcoin trading volume being reported was likely bogus," tweeted Stark, referring to a Forbes report from last summer.

[...] It's just yet another way the big crypto companies and investment funds manipulate the market.


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  • (Score: 4, Interesting) by Anonymous Coward on Thursday January 19 2023, @11:41AM (4 children)

    by Anonymous Coward on Thursday January 19 2023, @11:41AM (#1287528)

    The story I am getting involves Saudi Arabia getting off of the US dollar for oil trading, stoked by fears that the US dollar stability is being mishusbanded by the US Government by simply printing currency causing the US Dollar to lose value ( the number bandied about on the order of around 2%/month loss ).

    Our relentless money printing, combined with the Saudis growing acceptance of international oil trades not based on US Dollars is egging on another currency whose printing is not under control by the FED.

    My thoughts is what happens if the Saudi demand Gold for Oil. Simply because Gold is physical and cannot simply be printed. Everybody is cheating with their accounting systems. We may have to fall back onto much older ways of keeping score, as everyone games these new high tech ways of issuing tokens to represent wealth. Tokens which lose value as additional unearned tokens are simply printed up and jacked into the financial system. And we all are doing this as the way to pay our bills be issuing debt notes.

    Who is going to pay for all this omnibus stuff my Government passes? Debt is a very insidious concept. My people ( Native American peoples) learned about this the hard way. Somehow, we may think we own our stuff, land, whatever. If we owe, the debt gets called, and we can't pay, ownership of stuff can change hands in the blink of an eye.

    • (Score: 3, Insightful) by legont on Thursday January 19 2023, @02:38PM (1 child)

      by legont (4179) on Thursday January 19 2023, @02:38PM (#1287551)

      There is not enough gold.
      However, Russia still accepts rubles for oil. Just saying.

      --
      "Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
      • (Score: 1) by anubi on Friday January 20 2023, @01:34AM

        by anubi (2828) on Friday January 20 2023, @01:34AM (#1287650) Journal

        Not enough gold?

        It's valued only because of its scarcity, inertness, non-volatility ( using chemistry definition ), and human effort required to mine more.

        Those properties are precisely what makes it a good proxy for wealth.

        If we could simply print gold, it would be useful only as pretty corrosion resistant metallic coating which also has good electrical conductivity. It's usually has to be alloyed with something else to make it useful.

        Compare to diamonds. They are now industrially manufactured for use as abrasives. Even I, a lowly tradesman possess all the diamonds I need to do my work. I have diamond files, diamond cutting disks, diamond grinding powders. They possess a hardness property that makes them very useful for grinding something else down.

        Yup, made of the same stuff jewelers say is the symbol of love and marital matrimony.

        Industrial abrasive.

        The dollar loses value as we print more and more of them. I can't see digital currency either because there are so many of them around...like making your own NFT on the fly.

        Anybody can go mine gold, too, but it requires substantial investments in wealth, time, knowledge, and physical labor...combined the cost of mining it sets the price for gold.

        Unlike the dollar, whose cost to manufacture is only the marginal cost of another turn of the printing press.

        --
        "Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
    • (Score: 1) by SingularityPhoenix on Thursday January 19 2023, @05:49PM

      by SingularityPhoenix (23544) on Thursday January 19 2023, @05:49PM (#1287581)

      Certainly there are costs to the Saudi Arabian Monarchy to trade in USD, but as long as they do so they will have the backing of the USG, which basically ensures they will remain in power. It benefits the USG becasuse increased demand for USD to buy oil increases the value of the USD. The majority of the 9-11 airplane hijackers were from Saudia Arabia, yet the USG did nothing against them. If they're actually moving away from this its news to me.

      Deflation can be bad for the economy. It encourages hording cash, decreasing supply, causing more inflation. Hording cash means not spending it, which leads to business are not selling, which leads to layoffs, which leads to a recession or depression.

      Yes printing drives inflation, and it is much like a tax on holding cash. Even under the mattress the long fingers of the USG can tax it. That $100 bill used to light a cigar can be reprinted (without inflation) by the USG at a profit of ($100 - printing costs). But inflation drives people to put their money back into the economy. Buy purchasing gold, or part of a company, or rental properties.

      Now don't get me wrong, we have excessive inflation. I think all that stimulus during the pandemic, all that not working, but getting paid, decreases the amount of stuff available, which drives up the price. I think we're paying for the pandemics economics effects. They put it off but now its due.

      >Who is going to pay for all this omnibus stuff my Government passes?

      Its easy to borrow against the earnings of our children. The government giving us back some of our taxes is popular with voters. And more spending means more opportunity for kickbacks or "campaign donations". Our kids will pay for it. They can't vote yet. But, they'll pass the buck too, same as it was passed to us. But don't get me wrong, there is infrastructure like dams, technology, the power grid, that our grandparents paid for that we still benefit from too.

    • (Score: 4, Interesting) by number11 on Thursday January 19 2023, @07:30PM

      by number11 (1170) Subscriber Badge on Thursday January 19 2023, @07:30PM (#1287594)

      The US has been printing money for quite a while. And the US is a net exporter of oil.

      There's no particular reason why the oil market should be dominated by USD, except that after WW2 the US was the dominant economic power, since it was not only a major player, but also the only one whose economy hadn't been trashed by war. Maybe that's not true any more, and there should be a new way to value oil. Whether a basket of various currencies or gold (there isn't any other nation with economic power comparable to 1950s-1960s US). The mixed currencies is more likely, gold is a PITA.

      But if the oil economy becomes based on gold, gold will flow to the US. Why is that a problem (for the US)?

  • (Score: 5, Insightful) by zocalo on Thursday January 19 2023, @11:58AM (6 children)

    by zocalo (302) on Thursday January 19 2023, @11:58AM (#1287530)
    Irrespective of the alignment with more traditional markets, inflation, and the like, the crypto market is clearly still in turmoil. We're still seeing fallout from FTX - Genesis is almost certainly going to file for bankruptcy, possibly pulling Silbert's DCG down with it - another crypto platform lead has been busted for fraud, Bankman-Fried will likely cop a plea deal at some point, potentially revealling even more of the dodgy business practices in crypto. If that's not enough to scare you off, then I'm sure a new debacle [web3isgoinggreat.com] will be along any hour now.

    In that light, there's no way prices should be going up if there wasn't a lot of wash trading and other manipulation going on. If BTC were shares in a company going through this kind of turmoil they'd have been relegated to the pink sheets a *long* time ago. If you're still playing in the market now, you're either guilty of market manipulation (presumably to keep the price up while you cut your losses), a clueless soon to be bagholder, or making some very high risk speculative play and shouldn't come crying for help if (and more likely when) you get badly burnt.
    --
    UNIX? They're not even circumcised! Savages!
    • (Score: 2) by legont on Thursday January 19 2023, @02:46PM (4 children)

      by legont (4179) on Thursday January 19 2023, @02:46PM (#1287552)

      Yes, crypto prices have been manipulated for the whole crypto existence using ancient well known methods.You always get it for any unregulated market. Perhaps, that was the point of creators.

      --
      "Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
      • (Score: 4, Funny) by SomeRandomGeek on Thursday January 19 2023, @05:13PM (3 children)

        by SomeRandomGeek (856) on Thursday January 19 2023, @05:13PM (#1287575)

        I will go you one further and say that it is true by definition that cryptocurrency is only going up because of market manipulation.
        Commodity currency -- Currency that has value because it is made of something with inherent value.
        Fiat currency -- Currency that has value because a government promises that it does.
        Cryptocurrency -- Currency that has value because anonymous strangers on the internet think that it does.

        • (Score: 2) by legont on Thursday January 19 2023, @08:54PM (2 children)

          by legont (4179) on Thursday January 19 2023, @08:54PM (#1287609)

          In the end those "anonymous strangers" will either regulate it or it will die. The most interesting part will be the methods of regulation they will use.

          --
          "Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
          • (Score: 3, Insightful) by SomeRandomGeek on Thursday January 19 2023, @11:22PM (1 child)

            by SomeRandomGeek (856) on Thursday January 19 2023, @11:22PM (#1287641)

            You seem to assume that it will be regulated rather than dying. Think tulip mania. At a certain point, the winners will get out with all the money, and the remaining owners of the cryptocurrency will write the whole thing off as a learning experience. Cryptocurrency has no value other than exchange value. There is no limit to how worthless it can get.

            • (Score: 2) by legont on Saturday January 21 2023, @03:34AM

              by legont (4179) on Saturday January 21 2023, @03:34AM (#1287834)

              To "get out with all the money" as you put it, money needs to be available which I doubt will be for holders of crypto; even the few lucky ones. It makes a lot of sense for them to regulate it similarly to the way banks regulated dollars. It's also easier as most crypto is inherently traceable while old cold cash was not.

              --
              "Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
    • (Score: 2) by Dr Spin on Thursday January 19 2023, @09:05PM

      by Dr Spin (5239) on Thursday January 19 2023, @09:05PM (#1287613)

      If you are selling life-jackets, it pays to rock the boat. Who knew?

      I have some brains for sale if you need them!

      --
      Warning: Opening your mouth may invalidate your brain!
  • (Score: 1, Informative) by Anonymous Coward on Thursday January 19 2023, @04:10PM

    by Anonymous Coward on Thursday January 19 2023, @04:10PM (#1287563)

    Manipulation/flim-flam/ponzi describes our entire economic system. The riot index (cost/benefit of austerity vs. property damage) keeps it afloat

  • (Score: 4, Insightful) by istartedi on Thursday January 19 2023, @05:52PM (2 children)

    by istartedi (123) on Thursday January 19 2023, @05:52PM (#1287582) Journal

    The people who created crypto may or may not understand Unix, but they have some strange ideas about finance rooted in libertarian folklore, the gold standard, Austrian economics and such.

    Most of their ideas are disregarded by mainstream economists, and while I have quarrels with mainstream econ on some fronts (mostly when it comes to free trade) this is one area where I agree with them.

    The Bitcoin/crypto folks are the younger incarnation of the gold/silver bug "boomers", using 1s and 0s in an attempt to create a "sound money" economy, and they're just re-creating all the problems that arose and were solved by central bankers decades ago.

    It is absolutely no surprise to me that we are seeing exchange collapses (bank runs) and whales dominating coins (JP Morgan). It's like watching a digital simulation of the late 19th century robber baron era.

    --
    Appended to the end of comments you post. Max: 120 chars.
    • (Score: 2) by tizan on Thursday January 19 2023, @08:21PM (1 child)

      by tizan (3245) on Thursday January 19 2023, @08:21PM (#1287602)

      There is a huge difference between the gold rush and this...this is hidden behind techno babble. With gold ...you had gold in hand that may be valued or not..
      you could make jewelry or gold tooth with it etc...
      Here you have hot air and the whole system is regulated as well as street corner gambling. The guys running the show can just disappear with you left
      with techno hot air.

      In the olden days you rush to dig for gold ...and got some you still had gold in your hand if the market crash or all the bankers disappear without giving you money for your gold.

      • (Score: 2) by istartedi on Thursday January 19 2023, @09:24PM

        by istartedi (123) on Thursday January 19 2023, @09:24PM (#1287621) Journal

        All true, but consider that the real gold you held in your hands could be stolen, and since it was untraceable your gold was gone forever. You could lose your gold--just like the dude who forgot about a hard drive full of bitcoin and it's in a landfill now. Yes, it's hidden behind techno babble but it's a damned good simulation of the gold standard, all the way down to banks in the form of custodial accounts that run off with your money. Same deal as back in the day when Ma and Pa Kettle decided that having gold in the house was too risky, so they put it on deposit with the local banker who was a pillar of the community... until it turned out he wasn't.

        --
        Appended to the end of comments you post. Max: 120 chars.
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