MANIPULATION in the context of cryptocurrencies can take many forms and present several significant dangers
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1. Pump and Dump Schemes: Schemes where prices are artificially inflated ("pump") through intensive influence, causing investors to buy, only for the manipulators to quickly sell ("dump"), leaving other investors with losses.
2. Whales: Large investors (also known as whales) who own a significant amount of a cryptocurrency can manipulate prices by strategically buying or selling large amounts to influence the market.
3. Fake News and Excessive Hype: The spread of false or exaggerated news can lead to unfounded price movements, manipulating less informed investors.
4. Exchange Manipulation: Cryptocurrency exchanges can be targets of manipulation, such as falsifying trading volume to attract investors or manipulating orders to create false market movements.
5. Vulnerabilities and Hacks: Manipulators can exploit vulnerabilities in trading platforms, smart contracts or wallets to manipulate prices or steal funds.
6. Insufficient Regulation: The lack of adequate regulation in some jurisdictions allows manipulators to operate without significant consequences, increasing the risk for investors.
To mitigate these dangers, investors should conduct rigorous research before investing, use reputable trading platforms, and be aware of the warning signs of manipulation.
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