The people who get in on the bottom floor can secure a massive amount of the new cryptocoin at an absurdly low cost. As the coin gains more users, its valuation increases. The people who got in on the ground floor are now raking in millions in growth from the coins. Those millions are not very useful in crypto so they need to sell them back into actual currency like USD. When the bottom floor sells to get their millions in USD, it tanks the value of the coin, leaving everyone else “holding the bag.”
Because the people who made the coin had such a massive amount of the coins, their sale always tanks the value and leaves everyone else with cryptocoins worth less than what they bought them for.
Except that the boom-and-bust cycle is inherent to markets and there’s an entire cottage industry around encouraging those fluctuations in order to benefit from the arbitrage. It’s a classic pump-and-dump.
Not everyone wants market stability. If you’re in a position to affect the market, or react quickly to it, there is more money to be made in volatility.
It’s a pyramid/ponzi scheme.
The people who get in on the bottom floor can secure a massive amount of the new cryptocoin at an absurdly low cost. As the coin gains more users, its valuation increases. The people who got in on the ground floor are now raking in millions in growth from the coins. Those millions are not very useful in crypto so they need to sell them back into actual currency like USD. When the bottom floor sells to get their millions in USD, it tanks the value of the coin, leaving everyone else “holding the bag.”
Because the people who made the coin had such a massive amount of the coins, their sale always tanks the value and leaves everyone else with cryptocoins worth less than what they bought them for.
That doesn’t mean they want it to crash. Just that they are aware it will eventually.
The longer it doesn’t crash, the better for them.
Except that the boom-and-bust cycle is inherent to markets and there’s an entire cottage industry around encouraging those fluctuations in order to benefit from the arbitrage. It’s a classic pump-and-dump.
Not everyone wants market stability. If you’re in a position to affect the market, or react quickly to it, there is more money to be made in volatility.
Makes sense.
The crash really isn’t the intent, that’s true. They just have the majority of the coins, so when they pull out (rugpull) it crashes.
The crash isn’t the intent but a side-effect of their goal to make out with the money.
I guess it’s more that they don’t care about how that affects others.