Reddit is a very popular platform. Lots of analysts and crypto owners use it to spread their news or learn about crypto markets shakers and movers. However, not all the information on the website is trustworthy.
Some experts were arguing for a long time that Reddit groups are using the platform to manipulate the cryptocurrency market. So far, it was only speculation, but CNBC has openly warned people not to rely on Reddit’s information. It seems that scammers use the online platform to increase or drop the crypto’s prices dramatically.
Furthermore, the manipulation spreads on the other fields, too, such as stocks and other financial branches. The Lumber Liquidators’ price jumped by 20% recently due to speculative buying, which was fueled by Reddit groups. Soon afterward, they declared the stock as a “turnaround play,” and traders dived for its shares.
Such occurrences are so frequent that some experts decided to disown Reddit’s information actively. They hoped that if forwarned, people will manage to avoid being duped.
What do Experts Advise?
Scammers often use new investors to reach their ultimate goals. When new in the market, investors don’t know all the moves so well, and they’re easier to manipulate. However, even longtime traders aren’t safe from scammers.
They offer false information, prophecies, and suggestions to assure people of the future course of currencies. After this information causes major sell-off or buying profit as planned. That doesn’t mean that all the Reddit information is false. But experts advise not to believe anything before checking the news a hundred and one more times.
The cryptocurrency market is often volatile as well as unpredictable, but there is always a reason behind its moves. However, when it comes to scammers’ information, it causes rallies or downfalls without solid backing to the currencies. So, such rallies are very short-lived.
Crypto markets often reach a peak, where unequal valuations give rise to speculative buying trends. But artificially boosted currencies tend to collapse fast, causing traders to lose money.