Bitcoin’s most notorious detractors are at it again, grasping at any opportunity to slate the coin as it’s price fell by almost 15% earlier today.
After a spectacular recovery from the decimation that coronavirus wrought on world markets, Bitcoin has fallen back to $8,000 levels. The leading cryptocurrency recently cracked the $10,000 mark, only to get knocked back down to late April levels.
A rejection at the $10k level wouldn’t have come as a complete surprise to traders but the velocity at which it fell was unexpected. This has led to a resurgence in comments from critics calling out market manipulation, amongst other things.
Whales and scams
Famous stockbroker and economist Peter Schiff, a well-known critic of cryptocurrencies, recently tweeted regarding the drop. He believes that speculators who bought in anticipation of the upcoming Bitcoin Halving are “jumping the gun” and selling early.
“Looks like some of the #Bitcoin speculators who bought in anticipation of the halving couldn’t wait for the actual fact to start selling.”
Bitcoin’s own Dr. Doom, Nouriel Roubini, was less kind and spent no time mincing his words: “Massive pump & dump, spoofing, front running, wash trading! Total Scam!” he said in a tweet earlier today. This followed allegations of manipulation by ‘whales’ and exchanges posting fake volume and liquidity.
The comments are fairly typical of Roubini who seems bizarrely preoccupied with Bitcoin considering how much he hates it. However, they are not without merit. Manipulation in the cryptocurrency market is hardly an unknown phenomenon, with most investors accepting it as a known risk.
The fact is, cryptocurrency is still a nascent market even after 10 years and without greater adoption, majority control will always fall to whales. In February this year, the crypto newswire Bitcoinist published an article revealing the level of disparity in the market. With less than 1% of wallet owners holding 86% of the supply, it’s hardly surprising that manipulation is rife.
It’s self-evident that until Bitcoin becomes more widely adopted and better distributed, disparity and manipulation will be an ever-present threat.
Speaking of threats…
Crypto’s favorite CEO and outspoken twitter voice Mr. Binance himself, Changpeng Zhao (CZ), recently blamed the popular exchange’s DDOS attack on “competition”.
Early in the week, the major crypto exchange Binance was attacked by hackers in what’s known as a DDOS attack – Distributed Denial of Service. This low-level type of attack is quite basic and easy to perform but can have dire consequences if executed effectively.
In this case, the attack caused serious interruptions for the Binance platform, taking down network access for thousands of users. Now, CZ claims the attacks came from direct competitors of the company.
“Based on the attack pattern, it looks like work of our self-perceived competitors,” he said in a tweet.
In typical CZ fashion, he ended the tweet assuring customers that “Funds are #SAFU.” The platform didn’t appear to suffer any losses as a result of the attack and no further attacks have been reported.