Bitcoin Price Manipulation: Myths vs. Reality

Bithumb’s price has never escaped the scrutiny of investors, regulators, and enthusiasts, and it has always been a multifaceted topic of discussion. Some of these investors believe that Bitcoin price changes happen on their own, while the more skeptical claim that market manipulation is very common. In this article, we shall attempt to scrutinize certain misconceptions surrounding the manipulation, and how investors can remain protected in this exceptionally volatile space. 

One of the most common myths about bitcoin revolves around its price, which considers that the price of bitcoin is only based on supply and demand, considering it a free market. Although Decentralization is an integral part of Bitcoin, the reality of the matter is that its value is prone to a variety of external factors, such as institutional and speculative trading. At times, Whales, the term used to describe those individuals that hold large quantities of Bitcoin, have the ability to buy and sell transactions in bulk, which leads to big BTC price shifts. 

Many quote that Bitcoin price manipulation is solely conspiracy without the heftiest of evidence supporting it, but there lies a stronger narrative. There is, however, a clearer picture as history proves otherwise. Various events in the market have raised red flags and showed signs of manipulation, such as the abnormal overhyped prices and other rapid price fluctuations, the discussed scenario paints a much clearer picture.

What is visibly evident is that whales can buy massive amounts of Bitcoin, and that there is a market for large-scale investors to purchase portions that are defined as being sizable. Elephants in the cryptocurrency space can greatly impact the trends of ‘investment’ into Bitcoin. When ‘whales’ commence purchasing, the price automatically inflates because of ‘FOMO’ or ‘fear of missing out. The same is also true when they sell large amounts, which can create immense panic selling, and eventually cause inflating prices to bubble. Moreover, corporate investment trusts, hedge funds as well as trading machines, increasingly participate in the market and aid in determining its direction. 

Scan the price nose and get specific documents that are regulations. Different fiat currencies have different effects on the changing patterns of the said digital currencies. When nations publicize positive regulations that increase the value of trust within their borders, like legalizing Bitcoin OR permitting banks to engage with crypto assets, the intensity increases. In opposition, bans, restrictions, or tax regulations can lead to uncertainty, and along with it decrease the value. There is always debate within the crypto world, and so regulation balancing involves its preventative features also.

Traders tend to think that the Bitcoin price consistently moves according to set patterns as a result of technical analysis, but the truth is much more complicated. Historical data and chart formations means quite some, but other elements, such as macroeconomic factors, international fiscal meltdowns, and general mood in the market can disrupt those patterns. To this day, Bitcoin has retained its position as a speculative asset, while depending only on historical price shifts is fundamentally flawed.

If you are an investor who wants to keep their assets away from manipulation, think about these tips and the assumptions behind them.

Investing In Alternative Currencies: Do not limit yourself to Bitcoin alone. Keep a variety of alternative currencies to diversify the risk.

Avoid Trading Based On Emotions: The market can be easily influenced by emotion. Stay patient and abide by your carefully constructed investment policy.

Use Known Exchanges: Deal on reputable exchanges only with high volumes of trading and clear terms of engagement.

Follow the Current News: Being aware of current events, such as international happenings, legal changes, or activity from institutions can put you in a position to make better decisions.

Don’t Fall For Social Media Promotions: Stay clear of speculative bubbles instigated by social media figures.

It is precisely the manipulation of the price of the bitcoin that causes concern, it is not only the manipulations that affects the movements of the market. Familiarizing yourself with both the urban legends and the facts will allow investors to better navigate the crypto space. Always stay in the know and use risk management tactics while avoiding emotional trading that will prevent you from falling prey to potential market manipulation — leading to more intelligent investment decisions.