Cryptocurrency Pump-and-Dumps

Just Like Stocks, Cryptocurrencies Have Risks

Although no one could predict the patterns in which cryptocurrencies move with the same kind of precision that we do with stocks, these assets do share certain common traits with equity investments.

First, like some stocks, cryptocurrencies are volatile and sensitive to any kind of related news (like how bitcoin plunged on news that China would ban the cryptocurrency). Second, both types of markets depend on demand — although the demand elasticities may vary here and there. Lastly and most importantly, both are susceptible to pump-and-dump schemes and manipulation, which …

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