2023 has just started but the crypto market prospered with the rise of Bitcoin and Ethereum. The world’s biggest cryptocurrency has fully recovered since the FTX crisis, surpassing the $24,000 market as the Feb slowed rate hikes.
This sudden green market was explained by the slowing growth rate of inflation, gradually recovering investor sentiment, and good news about the market.
However, Mashable, a reputed independent online news site, said that recently there has not been much positive news about the cryptocurrency sector big enough to revive the whole market, nor have there been any huge investments. The only answer to this unexpected growth is that someone is manipulating the market.
As of mid-January, Bitcoin was trading steadily above the $21,000 threshold. This seems to be an unthinkable number in November 2022, when the FTX disaster took place. The cryptocurrency market had a disastrous 2022 as a series of stablecoins, lenders, and crypto companies collapsed, creating a domino effect for the entire market.
However, the situation will not get better in 2023. Recently, the SEC charged 2 crypto companies Genesis Trading and Gemini for offering and selling unregistered securities.
There is no good news in the market and retail investors are still viewing cryptocurrencies as a risky investment. So the question is who bought a large amount of cryptocurrency to restore the price in the market?
According to David Gerard, a blockchain expert, the cryptocurrency market is a very tiny mall, so it is easy to be taken over by “whales” holding billions of dollars of unpegged stablecoins and unofficial exchanges. “The bitcoin price needs to be high enough so the big boys’ loans don’t get liquidated, but low enough so bagholders don’t attempt to cash out and crash the price. It’s a tightrope,” David said.
John Reed Stark, former Director of the SEC’s Office of Internet Enforcement, had the same thought:
A study by the US National Bureau of Economic Research (NBER) showed that wash trade accounts for 70% of all transactions on unofficial cryptocurrency exchanges, and the majority of transactions are fake.
Wash trade is a form of market manipulation in which an investor simultaneously sells and buys the same financial instruments to create misleading, artificial activity in the marketplace. This action is prohibited and strictly controlled on the grounds that it increases the virtual price and creates a higher demand than the actual market.
Therefore, Mashable recommended that investors instead of listening to advice from cryptocurrency experts, need to stay cautious.
Recently, Anthony Scaramucci, former White House Communications Director, once stated that 2023 is the year Bitcoin recovers, and said that the price of copper may reach $50,000-$100,000 in the next 2-3 years. In fact, he now owns the investment company SkyBridge Capital, which was once bought by FTX.
Thanks to this deal, SkyBridge Capital made a large investment in the cryptocurrency market, just before the market crashed. Scaramucci once said that he hopes SkyBridge can buy back the shares it sold to FTX. Therefore, it is understandable that Scaramucci is trying to convince investors with good market forecasts to help his company pay back, Mashable said.
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision.
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