Is Market manipulation Illegal — -When the market itself is not legal (as in there are no laws) (originally published 9.21.2018)
Is Market manipulation Illegal — -When the market itself is not legal (as in there are no laws).
Have you been following Bitcoin and the Crypto Markets?
Have you been investing and hanging on at times with the wild swings and undulations of the prices?
Have you ever wondered what may be driving that?
Is there some sort of Puppet Master pulling the strings?
And if so, is that grand puppet master profiting?
Well, the answer is…perhaps. Jamie Dimon, CEO of Chase, made a comment back in September of 2017 that Bitcoin was a Fraud.
Bitcoin Price was about $3,000.
When the announcement hit, the market dropped 6% that next day.
In December, the same Mr. Dimon stated he was “open to shorting” Bitcoin.
By that point though, the Bitcoin price was almost $19K.
Then, a short month later, in January he retracted that statement and said it was a mistake to call Bitcoin a “Fraud”, and the markets moved again.
Why is this important?
If you know you are big enough to impact the markets — think Jamie Dimon, Goldman Sachs, and you know that a single article, or single “tweet” in the case of Elon Musk, then you know you can move markets up or down.
Let me give you an example.
Recently, Elon Musk of Tesla, who knew that there were many investors who were holding “short” positions on his stock, sent out a single tweet that changed everything.
What does this mean? Let’s follow a sequence.
1- Elon knows there are short sellers on his stock- This means there are investors who will profit only “IF” the stock goes “down”.
2- Elon sent out a tweet that the company has secured billions of dollars in financing — which cause the stock to go “up” and the short sellers (again, those who were betting the stock would go down), to lose on billions of the increase.
3- Then, Elon had to admit and announce that the financing wasn’t actually “secured”.
4- Which caused the stock to go back down, and down and down.
5- However, all the of the “short sellers” were cleared out, which improved the financial position of Tesla.
What does all this mean?
It means, what Elon potentially did was “Illegal” and stock manipulation. I’m not saying that is the case, but in the world of regulated stocks, there are rules, regulations, and yes LAWS.
Where does that leave us with Crypto?
Back to Jamie Dimon above.
Or, how about more recently, let’s use Goldman Sachs.
In early September, there was much buzz about Goldman entering into the market of Crypto.
That lead to the value of Bitcoin rising.
THEN….on September 5th. Goldman made the following announcement that they will DROP Crypto trading plans.
What happened to the markets? See the graph below. Yes, the BIG DROP in the middle, is September 5th, the day of the Goldman Announcement.
BOOM! The markets crashed! Dropped!
Why? Because Goldman said, not that they were actually “dropping” trading, but were just waiting.
Now…Let’s play the scenario out.
1- Goldman announces they will NOT trade in Crypto.
2- Behind the scenes, Goldman is “shorting” bitcoin (that is betting the price will go down).
3- Then, when the price is down to a level they are comfortable with, they “buy” back in with Bitcoin at a dip or low point.
Yes, you manipulate the market down, short it and make money the entire time, and then buy low and make money going up.
My guess? A few “BILLION” where probably made by this type of market manipulation.
Now, do I have any proof that Goldman did this? No. However, back when Jamie Dimon made the announcements with Chase, what did they do after the dip?
Why….they BOUGHT BACK IN of course.
Yes, Jamie and Chase drove the market down, and then bought when it was low.
Did Goldman do the same? Possibly. Probably.
The interesting part of this exercise?
Even if they did, none of it is illegal.
Why? Because the United States hasn’t officially ruled on what Bitcoin and Crypto Currencies are.
So, the next time someone claims that Bitcoin is the place for drug dealers and money launders….I would argue and beg to differ.
The BIG money, the billions, are being made by the bullies and banks of Wall Street who know they can play in an unregulated market.
So, what’ missing now from this article?
The last link to the Press Release (which I’m sure will be coming within 30 days or so), where Goldman Sachs announces they are now “back” in the market.
Of course, by then, they will have manipulated the market and made their billions.
Ahaa…you have to love Capitalism.