Pump n’ dump schemes have caused the collapse of XRP and Dogecoin prices; meanwhile, Ethereum continues its astronomical rise thanks to DeFi.
The pump n’ dump schemes come back. The schemes involved groups of investors that coordinate their buying, and subsequent selling runs riot with projects like XRP and Dogecoin.
Ripple’s XRP currency, which had surged over the last three days, now collapsed by 42% in the last 24 hours.
The reason behind this is that a group of 295,000 Telegram users had been inflating the price of the currency, notwithstanding the SEC’s ongoing lawsuit against the project. In the past weekend, prices have been up more than 150%.
The abrupt surge had attracted new investors like Kiss frontman Gene Simmons who bought into the pump, he revealed in a Tweet recently. And then debate ensued on Twitter over Simmons’ omission. With some proposing that he’d been left ‘holding the bag,’ a term for investors caught out by pump and dumped schemes-after the price eventually collapses.
Investors of Dogecoin faced a similar fate lately as the mem coin dropped by 13.6% in the previous day. After reaching highs of $0.037 last Sunday, the project has been continuously declining, racking up two straight days of losses.
The trading volume is also down to 40%, a strong indicator that the pumpers have already left the party, leaving Simmons & Co. with an ever-shrinking crypto stash. However, it wasn’t all bad in the crypto markets.
The global market cap is up by 1.2%, sitting comfortably above the $1 trillion marks because of strong performances from Ethereum, up by 6.4%, Cardano 20%, and Uniswap up by 5%. According to many critical metrics for Ethereum, January seemed to be one of the best months the project has ever had.
The project, now having a market cap of over $150 billion, has been outpacing Ethereum when it comes to daily transferred value thanks to the DeFi boom, 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.
The markets bounce back as massive caps lead to a market surge.
It’s been a strange week for Wall Street and global markets more broadly. After a hell of a week for investors saw many of the January gains about to be wiped out; however, things went another way.
Nasdaq was up by 2.6%, S&P 500 1.7% and the Dow 0.8%. All over the world, it was the same story. Exchanges in Shanghai, Australia, India, Hong Kong, Tokyo, and Europe have seen rebounding prices as investors poured back into the markets.
Driving the 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 contributed to many things. A key factor seems to be the US government’s announcement that the economic recovery would be faster than previously thought, with the employment set to hit pre-pandemic levels by summer.
However, several are worried that this is a bubble. The volatility around a broadening number of stocks, commodities, and cryptocurrencies, thanks to the r/WallStreetBets paradox, has led Bank of America strategists to make comparisons between today and the dot-com bubble around 2000.
Investors that eye an entrance into the stock markets shall take Gene Simmons’ advice:
“Not recommending any of these to anyone.”
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