The pump and dump schemes are back. The schemes, which involve groups of investors coordinating their buying, and subsequent selling are running riot with projects like XRP and Dogecoin.
Ripple’s XRP, currency which had surged over the last three days, collapsed by 42% in the past 24 hours.
The reason? A group of 295,000 Telegram users had been inflating the price of the currency, despite the SEC’s ongoing lawsuit against the project. Over the weekend, prices were up more than 150%.
The sudden surge attracted newbie investors like Kiss frontman Gene Simmons who bought into the pump, he revealed in a Tweet yesterday. Debate ensued on Twitter over Simmons’ omission, with some suggesting he’d been left ‘holding the bag’ a term for investors caught out by pump and dump schemes-after the price collapses.
Nice gene you bought the bag holders deluxe pack. You can upgrade to the free bundle with a addition of TRX or Tezos
— Scooter (@scooterxbt) February 1, 2021
Dogecoin investors faced a similar fate yesterday (Gene Simmons also bought Doge) as the meme coin dropped by 13.6% in the past day. After reaching highs of $0.037 on Sunday, the project has been steadily declining, racking up two straight days of losses.
Trading volume is also down 40%, according to Nomics, a strong indicator that the pumpers have left the party, leaving Simmons and co with an ever dwindling crypto stash. But it wasn’t all bad in the crypto markets.
Global market cap is up 1.2%, sitting comfortably above the $1 trillion mark thanks to strong performances from the likes of Ethereum, up 6.4%, Cardano, up 20% and Uniswap up 5%. For Ethereum, January turned out to be one of the best months the project has ever had, according to several key metrics.
The project, now with a market cap of more than $150 billion - making up 15% of all crypto market value - has been outpacing Ethereum in terms of daily transferred value thanks to the boom in DeFi, and more recently, decentralized exchanges, which have been stepping in to fill the void left by Robinhood’s removal of Gamestop and other projects from its exchange.
Markets bounce back as mega caps lead market surge
It’s been a strange seven days for Wall Street, and global markets more broadly. After a bloody week for investors saw many of the January gains almost wiped out, yesterday, things went the other way.
The tech-heavy Nasdaq was up 2.6%, S&P 500 1.7% and the Dow 0.8%. Across the world it was a similar story. Exchanges in Shanghai, Australia, India, Hong Kong, Tokyo and all of Europe saw rebounding prices as investors poured back in to the markets.
Pushing markets higher were mega cap projects like Apple (up 1.7%), Alphabet (up 3.69%), Tesla (up 6.%), Microsoft (up 3.46%) and Amazon (up 4.3%).
The good news is being attributed to different things. One key factor appears to be the US government's announcement that the economic recovery was going to be faster than previously thought with employment set to hit pre-pandemic levels by the summer.
But some are worried this is a bubble. The volatility around a broadening number of stocks, commodities and cryptocurrencies, thanks to the r/WallStreetBets phenomenon has led Bank of America strategists to draw comparisons between today and dot-com bubble around 2000. And we all know how that ended.
Investors eyeing up an entrance into the stock markets should take Gene Simmons advice: "Not recommending any of these to anyone."
Sponsored post by AAX
Learn More about partnering with Decrypt.