Cryptocurrencies fall after claims of market manipulation
Cryptocurrency markets remain subdued in the wake of a report in the Wall Street Journal that suggested prices in the digital asset markets were being manipulated by automated trading programs.
So-called bots – also known as web robots – are software applications that run automated tasks, and the WSJ report claimed these were being used to carry out trades faster than any human.
“The bot’s strategy is similar to ‘spoofing’, a practice in which traders enter fake orders, then cancel them,” the report said.
This tactic is used to manipulate prices and trick genuine investors to react to price movements caused by the bots’ actions – either selling if the price drops or buying when prices rise.
After its recent strong rally – gaining nearly 70% in September – Ripple’s XRP coin was among the biggest fallers in the top 10 cryptocurrencies by market capitalisation.
Ripple’s September gains were driven by expectations that its new xRapid payments platform would be successfully implemented by financial institutions.
News this week, however, that three companies were about to go live with the product, barely moved the price at all.
“This demonstrates the fundamental market principle ‘buy the rumour, sell the fact’ in action,” said Tanya Abrosimova at FXStreet.
Price round up
Here’s the latest round up of prices in the top 10, taken at 11am [London time] on Wednesday:
- Bitcoin -2.1% at $6,462
- Ethereum -4.5% at $218.99
- Ripple XRP -7.1% at $0.52
- Bitcoin cash -5.8% at $513.67
- Eos -1.7% at $5.55
- Stellar lumens -5.8% at $0.24
- Litecoin -5.4% at $57.88
- Tether unch at $1
- Cardano -3.8% at $0.08
- Monero -2.3% at $112.19