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How the Cryptocurrency Market 'Washes' Prices and Affects Retail Investors
In the cryptocurrency market, retail investors often overestimate their influence, believing that a few thousand USD in their wallet can dictate market movements. In reality, for professional market makers, this capital is insignificant, and they operate solely for profit.
A typical example is GAMA. The total supply is 7 million tokens, with retail investors holding 4.2 million at an average cost of about 1 USD. Market makers only need to buy 2.8 million tokens to gain control, but they cannot push the price up too quickly. If the price rises to 1.3 USD, all 4.2 million tokens in the hands of retail investors risk being sold off en masse, and no one is capable of absorbing this sell-off. Therefore, market makers often prefer the method of 'washing the people' rather than 'washing the price', meaning they create mechanisms that cause retail investors to sell automatically, allowing them to buy at a lower price.
A typical example is GAMA. The total supply is 7 million tokens, with retail investors holding 4.2 million at an average cost of about 1 USD. Market makers only need to buy 2.8 million tokens to gain control, but they cannot push the price up too quickly. If the price rises to 1.3 USD, all 4.2 million tokens in the hands of retail investors risk being sold off en masse, and no one is capable of absorbing this sell-off. Therefore, market makers often prefer the method of 'washing the people' rather than 'washing the price', meaning they create mechanisms that cause retail investors to sell automatically, allowing them to buy at a lower price.
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