Despite Crypto Bubble Crash, Pump and Dump Schemes Are Still Rampant
Crypto2020/05/14 20:30 by Ali Martinez
A glance at “Crypto Twitter” shows that the blockchain industry is oversaturated by speculators that lack financial literacy. This is the main reason why different communities surrounding a particular cryptocurrency, such as the “XRP army,” will do everything in their power to defend their views even when there is undeniable evidence that contradicts them.
With a market full of uneducated investors, some individuals have used their knowledge to gain popularity by estimating future movements in a given altcoin. This has provided them with enough power to build their own private groups and engage in market manipulation.
The infamous Palm Beach Confidential Group is a vivid example of this. The $5,000 subscription group has once again made it to the headlines after its main editor appears to have implemented one of the most vicious crypto-related pump and dump schemes of 2020.
Crypto Pumpers Benefit from Lack of Regulatory Oversight
Teeka Tiwari has stolen the spotlight of the crypto market. The analyst recently recommended subscribers of the Palm Beach Confidential Group to buy Tierion (TNT). Following his endorsement, the price of this altcoin skyrocketed by a whopping 155%.
A few days later, however, the selling pressure behind TNT increased substantially after Teeka told his readers that he had closed his long position.
By the time Palm Beach Confidential’s users were notified, Tierion had already lost 40% of its value. And, when the dump concluded it was down by nearly 70%.
Tierion Becomes the Most Recent Pump and Dump Scheme in the Industry. (Source: TradingView)
Those who rushed to buy TNT, just because it was recommended in the Palm Beach Confidential Group, may have found themselves with a worthless token. Indeed, the crypto asset currently does not have a use case, and its future is quite uncertain.
“TNT was mainly used in the legacy Chainpoint network, but with the regulatory uncertainties around TNT, the team moved on to a new version of Chainpoint that uses Bitcoin Lightning and DOES NOT USE the TNT token at all,” affirmed behavior analytics platform Santiment.
Even though Teeka could be blamed for not doing his research before recommending a token, most of the fault resides within those who followed the herd. The irrational behavior of chasing coins that are on the move may come with significant losses.
Smart Investing Using Blockchain Technology
What happened with crypto asset Tierion shows that many of the so-called “renowned analysts” within the industry are trying to benefit from unaware investors.
While this may not necessarily apply to all of them, it is important to take everything that is being said in a market with little to no regulatory oversight with a grain of salt.
Santiment pointed out that a look at the network activity and development growth of any given crypto asset can provide an idea of what is happening behind closed doors.
“To accurately look into a project’s health as a true contender [you must] ensure that [it] is showing steadily stable (or preferably increasing) levels of daily active addresses, Twitter growth, development activity rates, amount of top holder funds off exchanges, and trading volume. If all are moving upward, it is a great sign you are in an asset with some serious staying power,” said the on-chain insights provider.
As the industry continues to mature, more transparency will be brought to investors through the use of blockchain technology. Now, it is in the hands of crypto enthusiasts to do their due diligence to avoid “pump and dumps” like the one previously mentioned.
Featured Image from Unsplash
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