The Bitcoin Pump & Dump went off without a hitch this week. I hope you were not a victim. I'm not a bitcoin expert but I know a scam when I see one. Here is my take on how the scam went down:
Some people (Jeff Garzik I think is one) came up with the idea to raise the price of Bitcoin so they can dump theirs coins at a big profit. They came up with this idea of doing a Hardfork and to get people to buy bitcoin, they offered FREE digital coins to anyone who has Bitcoin in their wallets by November 11. Investors jumped on the chance to get free coins and instant profit and in doing so they drove the price of Bitcoin up to $7,880 a coin.
The insiders, then dumped their Bitcoin and bought Bitcoin Cash with their new wealth knowing that all they had to do to get out of paying investors and to cash in big again with Bitcoin Cash was to cancel the hardfork. Without more competition, Bitcoin Cash would skyrocket.
In the stock market world, if someone promised to pay investors a premium for their shares of stock in a company and investors started buying in order to cash in on that premium and it drove the price of the stock up, if the person didn't fulfill his promise, they would be thrown in jail for violating Pump and Dump rules or manipulating prices.
Today just a few days later, Bitcoin has lost 20%. While investors got cleaned, the developers of the Segwit2x Pump and Dump are laughing all the way to the bank with the inside knowledge they had. I sure hope you were not a victim.
As a newbie to crypto currency and still learning how all the scams work, would love to hear your opinion on this one.
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