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Comment by bluecoconut | Hacker News Reader

I wonder if market manipulation is statistically higher during highs of hype cycles? or is it just always happening?

> Faking volume allowed the site to climb in the rankings on these sites, which exposed it to a greater audience of people, and, ultimately, more customers. Because the site had large volume numbers, potential customers immediately thought that it was legitimate.

It makes me wonder what is happening right now in the AI hype cycle, specifically with regards to faking legitimacy, that we'll look back on as being simple manipulation in 1-2 years time

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Yes, every hype cycle brings reckless gamblers and outright conmen, but crypto is remarkable for the high ratio of scams to value produced. This was also true for the real estate boom preceding the 2008 crash, and the invention of stocks in the 1600s. Financial innovation seems to be somewhat riskier than purely technological innovation.

Conmen and literal criminals only go away if you make them go away or they stop making money. There's zero way to prevent any of these boring and antiquated scams from happening, no one to run to when it does happen, and zero way to undo it by design. Crypto people approach this by denying it happens, then that it matters.

Crypto is a holy grail for scammers, fraudsters, and conmen. You can "work" marks that live in an entirely different hemisphere, with no cut taken by whoever would normally get the money to you, the market is chock full of fools, by the very nature of the complete lack of utility of crypto so it's predominantly "true believers" who are obscenely gullible, have been scammed like three times before, and still will DM random people on instagram to get "in" on "the next big thing".

Even Casinos aren't allowed to put their thumbs on the scales this overtly.

"Fake it till you make it" feels like the current AI strategy. Now that the ChatGPT hype cycle has calmed to a simmer, we'll see what real world utility sticks around from the hype cycle.

Statistically it will be higher by definition because market abuse is one of the mechanisms that con artists use to get a hype cycle going. So I would think that from that it follows that if there is a hype cycle it has a higher-than-normal probability to have been generated by market abuse.

The most basic form of this is the "pump and dump" but there are a lot of others. In the crypto world it seems wash trading backwards and forwards to generate volume and inflate perception of market price has been endemic for some time.

>or is it just always happening? It's happening right now. The BTC to $30k rally is entirely fake. The volume collapsed after 15k and it pumps to 30k with trading volume a 10th of the descent? "Sure".

I would assume that people start market manipulating during the troughs. During the bull markets you shouldn't need to fake anything.

On the contrary. The best time to manipulate the market is when people are excited and money is running around. During the troughs things tighten up more and people are more concerned with losing money than missing a huge return opportunity.

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