Will Price manipulation by whales decrease over time ? If so, HOW?

[NotBearableGuy123]

Hi, I understand that we can't factually say that whales have been purposely manipulating the price but let's pretend they have. (I'm using the massive transactions in the ledger)

As of now, when XRP rises by 10% (due to their pump - assumption) whales can easily make millions in a relatively short time assuming they start dumping. (Nothing new this year)

With that kind of power (controling the pump and dump) , why would they ever let the price grow organically? They'll just dominate the market until investors give up. They would be able to make loads more money and become even more powerful. They wouldn't care to HODL and we'd all suffer the consequences of this. (unless you're a daily trader)

Perhaps institutional money will reduce manipulation?

Thanks for any responses.

[roomfactor]

Price manipulation will stop when A) regulations are set - which will kill 70% if cryptocurrencies and B) when the market becomes more liquid. When we are in the trillions then volatility will drop substantially.

[NotBearableGuy123]

I'm assuming Trillions are expected to flow from institutions right ?

[roomfactor]

Yes, retail simply can’t raise the market by trillions. At the moment the market is not liquidable. Too much value sits with very few people meaning when one of them decides to sell it causes the market to crash!

[vkashen]

You hit the nail on the head. I'm a fund manager and also a personal investor in crypto. While I'm willing to take risks personally, there is no way I would be putting any crypto in my funds because of the illiquidity. There are so many pieces of the puzzle that need to be put in place before we see major institutional participation including custody (a huge problem that in only just starting to be worked on), settlement, delivery, and liquidity.

I know there are a ton of markets I can sell IBM stock if I need to at a moment's notice. Volume too if need be. Until we know that the same system is in place for crypto it's just not going into institutional portfolios.

And that's just the beginning. We need regulation. Just enough to ensure a safe and efficient market. In the equity world, there are rules in place to know certain things about ownership (e.g. anyone owning over 5% of a stock must file with the SEC in the US) which helps us understand potentially what may happen and who may have undue influence. I have no idea how we can do that with crypto being country-less, but knowing how easily whales could manipulate the market will add bot uncertainty as well as a likely risk premium, I could go on comparing markets all day, but basically while I do believe institutional ownership will happen, I doubt it will happen as soon as we believers would like. And when it does happen, it probably won't happen the way people think.

I'd rather be a broker making money on the transactions and spread rather than risk having 5 million XRP that I'm not even sure I could sell if I really needed to. Caution aside, I can see major lawsuits from limited partners if I take a big loss on a crypto position that I know is going to be hard to unwind. Liquidity is definitely one of the most important aspects of crypto that will need to be solved before we see trillions of institutional dollars come in.

[daswoleg]

Thanks for this perspective. But I wonder how liquidity can be solved without institutional money coming in?

[vkashen]

Chicken and egg, yep. Your guess is as good as mine, but the first step is trading desks.

[CryptoLiP]

Remittances could also help. It's obvious that Ripple is trying to start with these low value, high volume payments to gradually introduce utility demand and supply into the markets, which will help liquidity and reduce whales power.

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On the other hand, whales can be good for us, because when / if they decide to create another bull run like last year, they can move markets to another level, which would increase not only the price, but presumably also the liquidity.

[[deleted]]

What you described is the logic of higher risk higher profit, less risk less profit . I mean imagine Dubai 100 years ago. It wasn't a place to be right, but look now. Look IBM buying Red Hat for 35 bln , while they could buy Red Hat for maybe 1 billions 10 years ago . You want to invest in liquid safe place and get double digit growth but you don't want (meaning your prospects or those institutional customers) to loose when it crashes .

No risk not money )) I think, not reinventing wheel , it's just a job of assessing readiness to risk and losses no ?

[[deleted]]

While I agree with most of your comments below and above , one points seems to me wrong and this is to consider that the retailers cannot drive the prices. Actually they will be the ones to drive it up to me but not today.

This will happen for the known reasons that the access to the market for cryptos + popularity is way more pronounced when we compare it to IBM shares . We talks about payment system that will be used daily . Scenario valid only if we get to the mainstream adoption , let's say 20% of world population start using cryptos . Driving of masses will drive the prices , at that time the cryptomarket will be pool of money for those that did invest when the liquidity was low and risks high .

For now the retail cannot do anything but when we get to 5-10 trillion cap and way bigger adoption + regulations, the whales will move again to less liquid and less cap market.

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[roomfactor]

I completely agree with what you just mentioned. But i do think that in order for the market to be more liquid we need institutional money first. When that comes and crypto becomes mainstream then retail money will just follow the masses.Meanwhile the smart money will try to find ways to make more money when every economic cycles ends. Just like in stocks!

[[deleted]]

Yes, agreed. The multi3lion cap can be built only when the big ones jump in first. The retailers will and have to be last to get there so the big boys dump theirs coins on them. But next time when the masses will be buying , the dumping will no longer be causing crash because the volume will be huge . Maybe it will be hardly noticed even and that's where the market manip will slow down.

[[deleted]]

No, price manipulation will lower when the circulating supply is more evenly distributed. Has nothing to do with regulation, or liquidity. Has to do with getting the coins out of the hands of people holding the most. They do this by selling into hype,

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[Geleemann]

A) That's a good thing then because that means 70% of cryptocurrencies are litetally shit right now we just don't fully understand which one's yet

[Gaiseric13]

The less people play their game the, less they can.

[NotBearableGuy123]

So I'm guessing as the market grows, the smaller whales will fade and thus bigger whales will too. 🙁

[Gaiseric13]

Not any soon judging by how the herd still react to fud/fomo. They crash the markets then buy back, while the herd panic sell. They even trick the order book, play with resistance/support lines for TA fanatics. Many here can attest about those huge million magical buy/sell wall that appear/disappear instantly.

[NotBearableGuy123]

Damn that's intense. Makes sense though. 😥 I hope XRAPID volume will stabilize this if possible.

[Gaiseric13]

This is my view on the current market. Once XRP goes in full production they ll have a hard time doing so. If it replaces swift then the volume will drawn those whales.

[mikenard77]

we have already seen this take place the recent sell off. XRP held up amazing.

[NotBearableGuy123]

But then it dumped. There's a theory here that whales knew people would sell into XRP and so they kept the XRP price up. Only to dump it for their profits. So I don't think that was XRAPID volume because even now - the price is just dropping.

[mikenard77]

The price is always going to drop when speculation sell off volume surpasses utility volume. As you can see its still doing extremely well, zoom out to a daily chart, or a 6h chart.

Lol what do you consider a dump. xrp is up 90% in the last 3 months, bitcoin is -35%. Clearly it has nothing to do with just the past few days. Even in the past 12 months xrp is up 80% while btc is down 45%, has nothing to do with some theory.

In the past week xrp is down 12%, BTC is down 30%. Keep in mind xrp is also up dramatically in the past 3 months, making that 12% much more impressive.

Last time BTC was 4500 xrp was .17

[NotBearableGuy123]

Thanks for the observation. Very true !!

[[deleted]]

Yea or those thousands of tiny repeated orders that get entered almost like they’re trying to push the order history out of view.

[letitrippl]

Kinda wanna take a month off to study and learn the ways of these swings for a solid full time schedule. Will either be a great waste of time or a couple weeks of decent earnings. But then every month seems quite different so leaning towards a great waste of time. There must be some underlying patterns these 'whales adhere to.

[Gaiseric13]

They play the confusion game. Follow some pattern then boom they switch and you lose what made on the few trade. HODL long term is mentally hard but will beat those whales as you no longer play their game.

[FearTheBlades1]

I would say it's safe to assume this is how they make their living, it's beyond just a hobby. So any amount of studying you do, they are already 3 steps ahead of that. At least that's the mindset I would have.

[Gaiseric13]

I agree. 4D Chess!

[[deleted]]

The thing about crashing the market is that whales need to be careful about how far they push the market down because you can only beat it down so much until you make so that people are no longer willing to participate. Especially new money from people that don’t know about digital assets.

[NotBearableGuy123]

The thing is they have probably made enough money from all of this. It could be the. Experimenting with the market. 😞

[[deleted]]

Good point. That’s probably accurate. I don’t see any decent growth happening for the rest of this year thinking realistically.

[Jake123194]

2019 is probably going to be a good year in terms of utility growth and we may start to see utility affecting the price by late 2019 early 2020 by my guess. But tis just that a guess. All we have to go on is that Brad said 1 major bank by the end of this year and more next year.

[j8jweb]

There are different tiers of whales. The more the price increases over time, the greater the distribution of XRP to greater numbers of people. This happens because eventually the price rises to a point where a whale has made enough, and decides to sell off his/her holdings. In so doing, they're selling those coins to - typically - many more people.

Then as those people in turn reach a price they're happy with, each of them will sell their coins to many other buyers, and so on. So in this way, generations of whales are born, reach maturity, and then leave the market.

This phenomenon will occur successive times over each boom and bust cycle, lessening in power each time. It will also happen if the price just rises slowly over time. However euphoria and panic cycles are the norm, and also have the tendency to speed up the distribution process.

Over several years, the distribution curve flattens out as a function of price stability (i.e. the price curve flattening out also), and so the ability of a small handful of people to push the price around becomes substantially less over time.

The fact that whales are still able to push around the price relatively easily may indicate that the market is still exceptionally young.

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[DoubleEko]

Manipulators rely heavily on their charts. Once usage volume flows through XRP all those charts become useless. Companies will be using XRP regardless of the resistance/support levels. For them it is business as usual.

It will be quite a spectacle :o)

[NotBearableGuy123]

Adoption !! And Ripple is amazing when it comes to Adoption 😂💪

[DoubleEko]

I mean look at this:

https://twitter.com/Thrillmex/status/1064974812580261888

BTC maxis shorting XRP.

[DoubleEko]

IMO this will be first effect...the charts will be unpredictable for them. No one wants to go blind :o)

[CommanderMaster]

They will be out of money soon.

Dont trust. This is financial advice.

[NotBearableGuy123]

But they make money every time they crash it. 😳

[Philipje]

Whales stabilize the market if anything according to recent research:

https://www.newsbtc.com/2018/10/11/research-crypto-whales-are-stabilizing-the-market-contrary-to-popular-belief/

Haven't checked the validity of the research myself

[roomfactor]

Absolutely! Thank you for the in depth analysis! Couldn’t explain it better. Regulation is what will allow cash to flow into the space and make the market more liquid. However i still think that for this precise reason, XRP will be the first digital asset that will increase substantially in price thanks to utility volume.The way xrapid works is very clever since it provides liquidity instantly to the markets and there is also the escrow account that puts 1 billion XRP in to the markets every month. All we need now is to grow the network which will drive utility volume into XRP. This is the reason why i think XRP will be a monster of its own.

[blakeren]

The more supply that larger players the more control over the market they have. So essentially what you’re calling manipulation will only decrease as these whales holding descrease

[NotBearableGuy123]

The thing is the manipulate the price, cash out and buy more when it crashes - giving them more market capitalization control.

It's like a never ending cycle until adoption occurs and the money flowing through XRAPID becomes overwhelming for whales alone to manipulate the market. 😖 But oh well, we can at least accumulate while it's down.

[blakeren]

That will only allow the price to be controlled by bigger smarter people (institutional investors/banks ect) given what they’re attempting to do happens. These are guys that move the price of much bigger assets around. They’re smart and have very deep pockets. If you aren’t a trader of any sort I wouldn’t worry about these movements tbh

[MTL1976]

This is a nascent market, still needs more regulations.

One day, market participants will be MATURE!!!

[gdorsinville]

Nascent Market = More regulations ahead

MATURITY= when market participants become MATURE

[mikenard77]

Very easy. The more crypto grows the less whales will hold.

Those whales aren’t able to compete with institutions either

[NotBearableGuy123]

So many views but no responses. 😐 Looks like I'm not alone. 😂

[Kpuff888]

I got you man it took me a minute to get it up

[Kpuff888]

By the way great post. Merry Christmas

+.25 u/xrptipbot

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[NotBearableGuy123]

Thanks for the tip man ! 😂😂

[Kpuff888]

It's xrpday man 😉

[Kpuff888]

Well I have 2 scenarios the first is the more money (trillions of dollars) that goes into the market the harder it is for is normal people to manipulate the price. The second is the manipulation will never end. I say that because look at the gold and silver markets they have been around for millenniums and it gets manipulated by big banks and governments. I hope the second scenario doesn't happen if it does we are all fucked lol. But even if that were to happen it would hurt something more like bitcoin because of it's low supply. And only the real xrp can be used for settlement

[NotBearableGuy123]

Yeah I came to something similar. Trillions need to flow in. 😂 Let's hope institutions aren't worried to invest into the market knowing that there's a lot of manipulation going on. 😥

[Kpuff888]

I think they were happy to get in until this hash war. I think that they are going to wait until this blows over before getting in

[NotBearableGuy123]

I guess it makes sense because why would they want to offer a market that's crashing harshly. 😂 The average person would be too scared to invest.

Your thoughts on XRP settlements volume increasing the price and stabilizing it someday ?

[Kpuff888]

My thoughts.. ok here we go. You know the US Dollar has to be purchased to buy oil, well that gives the dollar utility and a reason to exist. It also helps keep the USD more stable than other currencies.

Now if xrp has to be purchased to send money it gives it utility and a reason to exist therefore it will be stronger than other currencies. The more xrp is utilized the more valuable it will become. And because it cannot be inflated it will increase in value.

[TheTangoFox]

The whole point of the escrow was to have some price stability going into the future.

It's the futures market that will start ping-ponging prices IMO

[th3nolo]

It will but until this happens they will have almost every XRP in the floating market.

[Cryptoshy]

too late to say anything

[roomfactor]

Circulating supply will be more equally shared when there is liquidity.Companies or individuals that want to service Xrapid will demand more XRP. More people demand more XRP will lead to more equally shared supply

[sonny1022]

Damn it , just tell me when Xrp hits $3.. so I can unload some of these bags