Thursday, May 24, 2018

BREAKING U.S. Justice Department Opens Criminal Probe Into Bitcoin Price Manipulation

The Justice Department has opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies, reports Bloomberg.

The investigation is focused on illegal practices that can influence prices -- such as spoofing, or flooding the market with fake orders to trick other traders into buying or selling.

So much for Bitcoin being an anonymous trading vehicle. The DOJ is going to rip into the big players and look deep under the hood.

Bitcoin extended its Thursday declines after Bloomberg News reported the investigation, and was down 3 percent in the last 24 hours to $7,409 as of 9:32 a.m. London time. In late December 2017, Bitcoin traded as high as $19783.06.

Although I have been highly suspicious of Bitcoin, I did advise it as
a trade for high risk investors but got out in December.

I wrote on December 21, 2017 in the EPJ Daily Alert:
Over the last two weeks, Bitcoin has climbed to near $20,000 and is now trading in the $15,500 range. This trading strikes me as significantly different from the trading in the period just before this.

Among the four potential factors that I have listed that could bring the price down was buying exhaustion.

Since e-currency buying is completely driven by new buying rather than any underlying fundamentals, once the buyers stop coming the price will collapse. Current trading suggests that this may be exhaustion price activity. There may be some added buying coming in over Christmas as "bitcoin geniuses" sit around the Christmas tree telling their friends and relatives how easy it is to make money in Bitcoin but that could be the last upward draft. But I am not waiting around. It is time to take profits.

I identified the new "American run" in Bitcoin at around $4,000 anyone who was aggressive enough to buy at that time has very huge profits. The same thing with my mention of ethereum at $250 and again at $400,  It is now trading at $790.

There may be more upside in the future but e-currency is a very high-risk investment in the first place and it is now getting riskier. I'm out.
Bitcoin appears to be mostly a large pump and dump scheme. I am no fan of government investigations but the schmuck small-time Bitcoin traders who are showing huge losses are going to be surprised as to what the DOJ reports after it investigates.


Also see: Are Cryptocurrency Schemes Really That Much Different Than the Currency Scheme Launched by the Father of Socialism?

1 comment:

  1. DOJ should also investigate the plunge protection team and the paper precious metals markets.