Are Institutions Really Manipulating Bitcoin?

Over the past few weeks we’ve covered stories from how Bitcoin could be worth over $3 million, to November being the ‘Worst Month for Bitcoin in the Last Seven Years’ and accounts of ZEC ‘Insider Trading’ by Coinbase. Circumstantial evidence of price manipulation within the cryptocurrency market, potentially by institutional investors, has been rife. In this video clip, originally shot in June 2018, Glenn Beck Discusses ‘The Great Bitcoin Cryptocurrency Conspiracy’.

Do as I Say, Not as I Do

Financial heavyweights such as Jamie Dimon, of JP Morgan, have regularly hit news headlines with their statements surrounding the objectionable illegitimacy of Bitcoin and cryptocurrency. Dimon famously claimed that “Bitcoin is a fraud” and that he’d fire any trader “In a Second” for trading Bitcoin (September 12th, 2017). To add fuel to the ‘FUD’ fire, George Soros later went on to proclaim that “Bitcoin is a bubble” (January 24th, 2018). Goldman Sachs? “Most cryptocurrencies will crash to zero” (February 7th, 2018). We won’t even with what Bill Gates and Warren Buffett also had to say.

All of these statements in isolation, from extraordinarily wealthy individuals and corporations, could seem par for the course. The headlines may as well read: ‘Legacy financiers, who made their fortunes as a result of centralized systems, oppose decentralized evolution of finance and society’. Hardly the story of the decade. It starts to seem a bit less innocent when these statements are taken in the context of resulting cryptocurrency market price action, and, most importantly, in the context of their financial positions and actions.

For example, when Jamie Dimon made his “Bitcoin is a fraud” speech, the price of Bitcoin fell 24%. That weekend, the largest buyer of a Bitcoin fund in Europe was both Morgan Stanley and JP Morgan. It gets worse. George Soros’ “Bitcoin is a bubble” assertion was followed by a 44% price decrease. Two months later it transpires that his $26 billion family office has the approval to buy cryptocurrencies. Last but not least – Goldman Sachs “Most cryptocurrencies will crash to zero”, they deny any form of cryptocurrency trading desk and then establish one just before May.

What is particularly fascinating about all of these influential statements, and potentially negative price correlations, is that the actions of the individuals/corporations contradict their public persona and sentiment. This tactic – of misinformation, or contradictory information – has been used to spread uncertainty and doubt amongst general populations for centuries, and has lead to an incredible hoarding of both political and financial capital.

Follow the Money

In short, it is the actions of these market makers that we should be paying attention to, and not their sound bites. Even if the negative price action of the unregulated cryptocurrency markets is circumstantial, the very fact that JP Morgan, Goldman Sachs and George Soros are all buying up Bitcoin and alt-coins suggests that they have all identified a lucrative future outcome. There’s even growing speculation that the future valuations of Bitcoin will result in the world’s first trillionaire. So whilst the markets tank and all those around you are questioning the future of this nascent technology, make sure to follow, or at least pay attention to the money. Don’t do as they say, but as they do.