A recent article on Tesla resource website Evannex provides an insight into the same kind of market manipulation that the cryptocurrency industry is likely facing at present.
Author Charles Morris details the consistent success that Tesla’s electronic vehicles have had in the automotive industry and yet all the while the company consistently suffers at the hands of negative news.
It doesn’t take a genius to draw comparisons between the giant corporations that Tesla and cryptocurrency both challenge. While Tesla stands to bring down the traditional, gas-fuelled automotive industry, cryptocurrency challenges traditional banking. Both are age-old industries with almost limitless capital and close ties to the media and both stand to lose billions should modern, disruptive technology replace them.
In his article, Morris derives from Peter Forman of CleanTechnica’s description of the way in which the media portrays Tesla founder Elon Musk as a ‘flamboyant and unstable celebrity billionaire‘ and cherry-picks facts and speculation to create a carefully crafted narrative that paints Tesla in a bad light. Since the media itself has no obvious incentive to do this, it would seem likely that the influence comes from those looking to alter the TSLA stock price with market manipulation.
At present, cryptocurrency doesn’t benefit from the mainstream media coverage that massive corporations like Tesla do but if recent revelations of fake news regarding the Goldman Sachs BTC desk is anything to go by, some level of market manipulation is clearly afoot.
Forman continued his explanation regarding the way in which large groups of investors, looking to short the market, communicate via forums to formulate reasons for why Tesla stock will go down. They then spread this fake news through whatever media channels they can.
So is this is just FUD but on a massive, organized level? Kind of, but it goes deeper than that. Forman believes these groups collaborate to place massive short positions on a regular basis to the degree that investors consistently recognize the manipulation. “The net result is that rallies are marginalized and dips exaggerated.”, he states.
To some of you this may not be news, and to some, it may be pure speculation. However, considering the recent cryptocurrency market movements, revelations of fake news and huge shorts being conveniently placed, it certainly bears a striking resemblance to Tesla’s woes.
In the largely unregulated market of cryptocurrency, fact-checking has become the responsibility of the individual – but how do we convince an entire community to double check a story before they panic sell?
Morris believes the FUD machine isn’t unstoppable though and ends his article with the positive sentiment:
“Later this year, if Tesla can achieve profitability, it may be the short sellers whose ruination provides the blood sport we can enjoy with our morning coffee.”
Let’s hope the crypto industry can do the same.
Mark Hartley is an IT specialist, freelance writer, keen traveler, and blockchain enthusiast. He has worked on the trading floors of the world’s biggest interdealer broker in London and helped integrate crypto-services into IT trading systems. When he’s not searching for the world’s most beautiful beach, he’s nose deep in any crypto and blockchain related news.