I have a pretty crazy theory that I want to share but hopefully I won't break the record for downvotes in the process.
I have been thinking for a while that something seems suspicious about the way the market has been moving lately. Isn't it strange how most of the coins pumping are all "cheap" as in they are less than $10 per coin? Isn’t it strange how the crypto market cap grew by $58 billion today, but Bitcoin’s market cap did not change at all? Then I had a realization. What if everyone is being played by a greater power. If you don’t like conspiracy theories stop reading now.
Everyone has been justifying the altcoin surges as Bitcoin taking a rest and dumb money chasing “cheap coins”, but what if it is actually institutional investors using alt coins in order to accumulate Bitcoin. It makes a lot of sense. If you look at the dates the surges started
- XRP - December 8
- XLM - November 27
- IOTA - November 6
- ADA - November 27
- XEM - December 8
The futures trading press release went out on December 1, but what if some people knew that it would be approved ahead of time? If you are an investor with deep pockets you have a problem. You want to be able to bet on Bitcoin’s future price, but you don’t own enough Bitcoin to be able to manipulate the market (it is much easier to gamble when you control the outcome). You need a way to accumulate. Articles start to hit the press about how a small group of whales control a huge amount of the supply of Bitcoin and that makes it dangerous, etc. Big players are trying to convince people that Bitcoin is not a safe investment. Lots of bubble talk spreads. Jim Cramer says you are better off going to Vegas than buying Bitcoin. It doesn‘t scare the public away.
These investors are usually the ones who get first stab at new assets. They get to invest early in companies, they get first stab at IPO shares when a company goes public, but with Bitcoin they are late to the party. How are they going to accumulate? They aren’t stupid. They realize that driving the price of Bitcoin down too much to buy cheaper will scare people away from the market, and there is a limited amount of downside (it can only go as low as $0), but there is an infinite amount of upside. They also don’t own enough Bitcoin to crash the market that far. So what do they do?
The answer is, find alt coins that are “cheap”. They know that if someone has to choose between a $15,000 dollar coin and a $1 coin they will choose the $1 coin every time. It is a psychological thing. Everyone just looks at the price and believes that $1 coin can also go to $15,000 one day. So if institutional money starts to buy up huge amounts of these “cheap coins” and gets the general public on board, they can then accumulate huge amounts of Bitcoin without the Bitcoin price changing at all because alt coins trade against Bitcoin! If you want to quadruple the amount of Bitcoin you have, it is much easier to pump up a smaller coin and sell it, than it is to drive down the Bitcoin price 4x to accumulate more for the same amount of USD.
Take a look at some of the headlines lately. I suspect the press releases are also coordinated:
- RIPPLE to become the new BITCOIN? Surge in new cryptocurrency as banks FAVOUR it
- Bitcoin latest: Ripple’s XRP is best-performing cryptocurrency with 380-fold increase in 2017
- Bitcoin price WARNING: The cryptocurrency will burn out in SPECTACULAR CRASH
- Bitcoin is Akin to Gambling, Causing Egypt to Ban It
In addition to these alt coin surges, every time Bitcoin looks like it is going to break out a new sell wall appears and some market selling into the buys begins to drive the price back down. To me this is a very well executed effort to hold down Bitcoin’s price while accumulating more by pumping alts. I noticed earlier today a $1 million buy wall on XLM that was moving up as the price increased. Is that how a normal person would buy up XLM? It is possible, but I doubt it.
I know it seems wild, but if this theory is correct then it means at some point there will be a pretty fantastic dump with alt coins and a giant surge for Bitcoin.
Of course, I could also just be thinking crazy thoughts.
Also posted on reddit: https://www.reddit.com/r/BitcoinMarkets/comments/7nzlwh/bitcoin_manipulation_theory/