Blockchain startups are entering the space with the goal of overthrowing the king known as "Bitcoin" and taking over that coveted #1 position. In my personal opinion, I don't see why any new blockchain startup wouldn't want to set their sights on eventually achieving this goal. The word for it is competition and competition is healthy. The lack of competition in the crypto space has the market in its bearish state because when there's no competition there's also no standard or barriers of entry. And we have already seen what happens when there is none of the aforementioned. The standards are dramatically lowered and it gets overcrowded leaving the need for some old worthless projects and coins to be sought, delisted or burned out of existence.
As it stands, there are over 3000 worthless cryptocurrency coins, tokens and projects taking up valuable space on the blockchain. Lately, I have become concerned that the true passion in cryptocurrency and blockchain technology has already seen its best days in such short amount of time. Furthermore, I have to admit that I have witnessed some great projects fail because while they had a community behind them, their communities didn't have the projects' best interest at heart or shared their long-term goals. In fact, their communities were likened to looking for the next big pump and dump scheme or "pump groups" as they're mentioned. This is when fake investors scout new projects, buy really low, rally the coin or project on social media - driving up the cost and then dumping all the coins back on the market pulling off a kind of investor level exit scheme if you will.
In an article written by Andreas Townsend, The Oracle Times, reported that in an independent investigation conducted by the Wall Street Journal discovered that more than 63 pump groups using Telegram and Discord manipulated 121 markets costing investors massive losses.
In its investigation, the Wall Street Journal found that more than 63 “pump groups,” which managed to pull off more than 170 pump and dump schemes, manipulating the prices of 121 cryptocurrencies, used Telegram and Discord to push different pump schemes. Andreas Townsend. The Oracle Times.
The “pump groups” in the cryptocurrencies market usually manipulate the assets' prices on unregulated crypto exchange platforms, so they don't have to worry about authorities and sentences. Andreas Townsend. The Oracle Times
The pump-and-dump schemes involving cryptocurrencies are similar to the traditional schemes pulled off with conventional stocks. Basically, the “pump groups” manipulate the market artificially surging an asset's price, only to dump it later, causing massive losses for those who invested hoping to get rich fast. Andreas Townsend. The Oracle Times.
Now it's time to leave you with some important tips you've probably heard a million times like:
- Always research before investing (i.e. find out as much information as possible or necessary in which you will feel comfortable knowing it is not a scam or likely to become one)
- When you see a sudden spike in a coin without any basis to back it up, then it is likely being pumped (i.e. a group is manipulating the price)
- Make sure the projects' members all have LinkedIn accounts or official verified public profiles with up to date contact information (i.e. name, address, phone, email, etc.)
- Finally use your best judgment (i.e. you are your own best friend when it comes to investing and the last thing you will want to do is let yourself down)
Speaking To My Audience
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