This is financial advice. In the US, it is considered illegal for one to disclose financial advice to another without being in possession of a piece of paper that allows them to do so.

Chances are, here in the UK, there is also an act or statute (a polite request masquerading as an enforceable law) that seeks to prohibit me from communicating as I see fit.

However, this post is between me and you, the reader. It is for you to decide whether what I'm saying is crazy(probably is), or whether it can be helpful. We need to start being responsible for ourselves and stop allowing men in suits to dictate what we can and cannot converse about.

If you still want to hear what I have to say, stick around. If my lack of qualifications is reason enough to think I must not know what I'm talking about, then I would urge you to reconsider what makes a person worth listening to.

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If you are still with me, let's get started.

WTF is going with the markets?

There's a lot of talk about the banks being behind the latest crash in the cryptocurrency markets. For most, this would make sense, as the overwhelming sentiment among crypto-enthusiasts is that digital currency is a huge threat to the banks. Why then would the banks not do everything within their power, and use their magic money machines to cripple their adversary before it becomes a genuine competitor?

For me, however, this comforting belief has eroded with an accumulation of subtle, but undeniable revelations. I now find myself viewing cryptocurrency as a predetermined replacement for a banking system that has served its purpose, making the theories about the banks being behind the crash(at least not in any capacity other than taking a profit) too difficult for me to swallow.

My theory on what's going on sounded absurd to even me until a couple of weeks ago, but then I came across what I believe to be confirmation of my suspicions.

How it happened

After a month or so of trading, a few BTC earned and a thorough examination of the markets, I came to the following realisation:

Every market, at least on bittrex where I do my trading, was in either an active or dormant state of an advanced, extended pump and dump.

There are several different strategies that I have noticed, but one very common one is as follows:

The price will be pumped from, for example, 0.0005 BTC to 0.003 BTC. In a typical pump and dump, the pumper would then be looking to sell as much as possible at a high price and make off with a decent profit. But instead, what I keep seeing is the price being pumped to 0.003, and then an exit point will appear at 0.00299999 giving people the opportunity to escape with a profit. Once that buy order has been filled, the next available one will be considerably lower, and I suspect that the pumpers even sell back to themselves in order to start a panic.

Of course, the pumpers now have a large quantity of this currency, so they will throw up some buy walls, which will continue to decrease in value until as many people as possible sell their coins.

Now, to anyone paying close attention, it is glaringly obvious that the person/persons/entity that is buying from the panicking sellers, is the same entity that pumped the price. So now, they have a shitload of this currency that they need to get rid of. More often than not, however, they do not. At least, not straight away.

The pump goes into a dormant state, attempting to fool observers and traders into believing that the pump and dump is over.

Now the important thing to understand at this moment, is that while the price may be sitting at 0.0005 BTC or so, and while there appears to be a lot of natural sell orders all the way up to 0.003 BTC-- where it got pumped to, those sell orders are almost entirely controlled by the entity who pumped the coin.

The goal now becomes to control this price range and buy up as much as possible at this price. Then, once a certain amount is accumulated at the lower price, it will be repumped, often even higher.

TIP: If you are on bittrex, you have the option of extending the buy/sell orders table to 50 or 100 rows. I advise you do this, as you can spot the moment when the pumping entity removes all of their sell orders in order to pump the price with far less BTC.

Now, I learned this by watching the markets for hours and experimenting. And in doing so, I was able to make a few BTC for myself, allowing me to address some financial issues and upgrade to a high performance PC that can better handle 14 bittrex tabs open.

But, right when I thought I was about to become a millionaire in the next few months, things started to change. This sounds crazy, but I noticed that the pumping bots were starting to learn from my exploits. I also learned that, while it may be possible to buy into a coin for 0.2 BTC and exit with over a BTC (thanks ParkByte), entering with 1BTC and trying to leave with 3 is far more difficult-- that is, on the low volume coins that I tend to favour.

I lost like half a bitcoin. And it was a cunt, because I hadn't posted on Steemit in a while, so I didn't have anything coming in to replace my lost funds. The thing was I had watched a 63 BTC buy order get filled before the price dropped nearly 50%, and anyone with 63 BTC is surely not stupid enough to make such an error. So, I bought in while the 63 BTC was being sold. A week later the price had still not gone up and it was time for me to buy dog food etc. I had to leave with a sizeable loss.

I watched this coin for two weeks and it never went higher than the price the 63 BTC was bought for. I became confused about how that person was planning to make a profit.

Considering the coin was trading only on bittrex, I knew the coins were not being moved to another market and sold. The coin was shite, so I was fairly certain the plan wasn't to hold long term. I considered that it could be a money laundering operation.

Perhaps the pumping and dumping through various bittrex accounts is an excellent way to launder dirty money. After all, if you cash out a huge profit on there, and it turns out the accounts that took heavy losses to make you rich were funded from shady sources, how could anyone prove that you had anything to do with that?

The only other option I could think of, and one that was perhaps inspired by Julian Assange's talk on AI propaganda and how it would be so advanced humans would not be able to recognise it for what it was.. was that the markets were being controlled by AI, and I couldn't figure out how they were going to make their money back on what appeared to be a loss to me, simply because I was a stupid human.

I spoke to my brother @tonyr around this time and told him what I had come to believe. Being very open-minded, and having way too much faith in his little brother's intelligence, he didn't seem too shocked by the accusation. Certainly not as shocked as others whom I disclosed my theory to.

But, a few days later, upon the addition of a new coin to bittrex, I learned I may have been correct all along.

https://numer.ai/

We are incentivizing the construction of an artificial intelligence hedge fund with Numeraire, a cryptographic token on the Ethereum blockchain.


This coin, Numeraire(NMR), is very fucking interesting. It as an attempt to create an AI buy holding tournaments to see who's AI can make the most profits pumping and dumping coins.

So WTF is going on with the markets? This is what is. And, the coin I took a loss on did end up getting pumped higher than where the 63 BTC was sold at. So, it wasn't that I was too dumb to understand, I simply underestimated the length of these advanced pumps. These are probably not AI so smart that we don't know wtf they're up. More likely, they are simply bots that have been programmed to do x when y happens, just like any other.

Where as I thought that the entire markets were controlled by one, massive, AI/bot network that was funded by some biilionaire who hired some techies to exploit the cryptoscpace, I was now presented with the idea that it is actually lots of different AI's battling against each other.

I still do not believe that. I think one entity has far out down the rest in this tournament, and is most likely exploiting the other pumper and dumpers as well as the markets themselves.

Today is about fear, I think. You are supposed to sell.. Because you are selling to them.. Those who will pump the price back up into oblivion in a few days and have you buying back off of them at ridiculously high prices.

An interesting thing to note is that the winner of these AI pumping tournaments will receive their funds in NMR tokens. Now this is another coin that I saw MASSIVE sell orders being filled when the price was up at 200 dollars or so. Since then, I have watched the price be forcefully suppressed down to 21 dollars.

Now let me ask you this. If you are entering the NMR tourney, and clearly are in position of the resources to pump and dump coins, would you want the prize funds, NMR tokens, to be worth 200 dollars, or 21??

I believe that someone is trying to be a smartarse, and are attempting to make an astronomical profit off of the very coin holding the competition. I am looking for an entry point, because I feel fairly confident that the price will return to 200 and surpass it whenever this competition starts to come to an end.

So.. my advice is to remember that crypto is still not mainstream, and that it will be. All this red on the market is just major profit taking, so long term holders should not be worried at all... As long as the coin you're holding has a function that is useful for society. Day traders should study only a few coins very, very closely, and figure out what the strategy is. And most importantly, have patience. These bots have patience, and if you feel strongly a price is going to go to a certain point, don't panic when the landscape changes.

That was not so easy to explain, so I hope I didn't do too bad a job sharing my thoughts.