The cryptocurrency market is notorious for its volatility, and market manipulation plays a major role in shaping price movements. From meme coins and political influence to orchestrated scams, investors often fall victim to deceptive tactics that result in massive financial losses. In this article, we explore some of the most notorious market manipulations in recent years and provide insights on how to protect yourself.
How Does Crypto Market Manipulation Work?
Market manipulation occurs across various sectors of the crypto space, but it is particularly rampant in speculative projects. The main manipulation tactics include:
✔ Pump-and-dump schemes, where large investors (whales) artificially inflate prices and then sell off
✔ Fake news and misinformation, designed to manipulate public perception and create buying pressure
✔ Political influence and endorsements, where public figures unintentionally or deliberately impact prices
✔ Social media hype and influencer marketing, which can create artificial FOMO (Fear of Missing Out)
Manipulation can target both meme coins and established cryptocurrencies, making it crucial to stay informed.
1. The Libra Crisis and the Argentine President
One striking case of crypto market manipulation involved Argentinian President Javier Milei and the cryptocurrency Libra (not to be confused with Facebook’s Libra project).
- Milei strongly advocated Bitcoin and the de-dollarization of Argentina, leading to massive price swings.
- Shortly after his election, rumors spread that his administration was planning a national crypto integration—with Libra as the primary asset.
- Libra’s price surged by 500% within hours, only to crash soon after.
- Later, it became clear that there was no official government endorsement, but early investors had already profited.
This case highlights how political rumors can cause extreme volatility, often leaving retail investors at a loss.
2. Donald Trump, Crypto Reserves, and Meme Coins
Donald Trump has also been associated with crypto market manipulation, both directly and indirectly:
- Trump and the Alleged Crypto Reserve: A now-deleted tweet suggested that a Trump-backed crypto reserve held large amounts of Cardano (ADA), Solana (SOL), and XRP, causing sudden price surges.
- TrumpCoin & MelaniaCoin: Meme coins linked to Trump and his wife, Melania, skyrocketed overnight after a post on Trump’s X account (formerly Twitter). While the coins were not directly manipulated, the sheer hype around Trump’s name led to instant price explosions.
This illustrates how prominent figures can unintentionally or strategically drive market speculation.
3. Squid Game (SQUID) – The Ultimate Rug Pull
Another infamous case of market manipulation was the SQUID token, a play-to-earn cryptocurrency supposedly inspired by the Netflix series Squid Game.
- The token price surged from a few cents to over $2,800 in just days after a tournament was announced requiring SQUID entry fees.
- Red flags were present from the start—investors soon realized that they couldn’t sell their tokens.
- Shortly after reaching its peak, the developers drained all liquidity and disappeared, sending the price to zero.
- This became one of the most well-known rug pulls, a scam in which developers abandon a project after extracting massive profits.
This case serves as a stark warning about too-good-to-be-true investment opportunities.
4. Market Makers & Bitcoin Price Suppression
Many analysts suspect that market makers and institutional investors actively control Bitcoin’s price to prevent extreme volatility.
- When Bitcoin approaches key resistance levels (e.g., $69,000), large sell orders often appear, pushing the price back down.
- Similarly, strong buy orders are often placed around support zones (e.g., $30,000) to prevent a total crash.
- This suggests that large players strategically manage price movements to keep Bitcoin within an acceptable range and avoid over-speculation.
5. Fake ETF Announcements & Media Manipulation
Fake news about Bitcoin ETF approvals has repeatedly triggered massive price swings.
- A false report about a BlackRock Bitcoin ETF approval led BTC to surge by 10% within minutes, only for the price to collapse when the news was debunked.
- Bad actors use social media and even mainstream financial news to spread misinformation, causing retail investors to buy in at artificially inflated prices before whales sell off.
6. Tether (USDT) & Market Influence
Tether (USDT) has long been suspected of artificially inflating crypto prices by minting unbacked stablecoins.
- Large Bitcoin price rallies often coincide with increased USDT issuance.
- Some studies suggest that newly printed USDT is used to buy Bitcoin, pushing prices up without organic demand.
- Despite repeated scrutiny, Tether remains a dominant force in crypto trading, and its role in market manipulation remains controversial.
7. Elon Musk & The Dogecoin Pump
Elon Musk’s tweets have repeatedly manipulated Dogecoin’s price.
- When Musk called DOGE “the future currency”, the price skyrocketed.
- Later, when he joked on TV that Dogecoin was a “hustle”, the price crashed.
- Musk’s influence showcases how a single high-profile individual can move markets, often benefiting insiders who anticipate his actions.
8. Whale Wash Trading & Fake Exchange Volume
Some large crypto exchanges and private investors engage in wash trading, where fake transactions create an illusion of demand.
- By trading with themselves, they artificially inflate trading volume, attracting new buyers.
- This tactic helps unknown tokens gain “trending” status on major exchanges, tricking investors into buying in.
Example 9: Flash Crashes, Leverage Liquidations & Crypto Market Manipulation
Many Bitcoin crashes are linked to leveraged trading liquidations, a classic form of crypto market manipulation.
- A notable event occurred when Bitcoin dropped from $60,000 to $48,000 within hours.
- This sharp decline was triggered by automated liquidations of overleveraged positions, where cascading stop-loss orders caused a rapid sell-off.
- Large players can intentionally trigger these crashes to buy back Bitcoin at a lower price, taking advantage of forced liquidations.
10. Institutional “Buy the Dip” Strategy
While mainstream media often promotes panic-selling narratives, institutional investors use market crashes as opportunities.
- Retail investors panic-sold at a loss, while institutions accumulated assets at a discount.
- When Bitcoin dropped below $20,000 in 2022, many news outlets predicted a “collapse of crypto”.
- Meanwhile, firms like BlackRock, MicroStrategy, and Fidelity were quietly buying up massive amounts of Bitcoin.
How to Protect Yourself from Crypto Market Manipulation
Market manipulation is a persistent problem in crypto, but there are ways to mitigate risks. Here are some essential protective strategies:
✔ Verify information sources: Avoid relying solely on social media—always cross-check data with official sources.
✔ Don’t fall for FOMO: If an asset is skyrocketing in value without a clear reason, take a step back before investing.
✔ Monitor whale activity: Large holders often manipulate markets. Use blockchain analytics tools to track major wallet movements.
✔ Understand tokenomics: A project should have real utility, not just hype-driven speculation.
✔ Be cautious with political endorsements: Politicians and celebrities often influence markets, but their involvement doesn’t mean a project is legitimate.
✔ Invest in projects with strong fundamentals: Instead of chasing speculative trends, look for projects with real-world applications.
✔ Large-cap projects for stability: Established cryptocurrencies like Ethereum, Polkadot, and Chainlink offer lower risk compared to meme coins.
✔ Thoroughly research small caps: If you’re considering high-risk, high-reward investments, do your homework. Some promising small-cap projects include Serenity (SERSH), Supra, and Redbelly Network — each working on real-world blockchain solutions. We have already introduced Serenity on our site in the following article: „Serenity (SERSH) – A DEPIN Coin Flying Under the Radar“.
✔ Recognize rug pulls: Watch out for warning signs such as anonymous teams, sudden liquidity withdrawals, and unsustainable rewards. For more details on rug pulls, check out our article: “What Is a Rug Pull? Rug Pulled Meaning & How to Avoid Crypto Scams“.
Conclusion: Crypto Market Manipulation Remains a Serious Issue
Market manipulation affects all levels of the crypto industry, from meme coins to established digital assets. While some traders make profits by riding market waves, many retail investors end up losing significant funds. This is why it’s essential to stay informed, conduct research, and avoid falling for hype-driven schemes.
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