There have been a lot of articles written about the price manipulation in Bitcoin. This is a trend that is starting to take place, as there are more people discovering the benefits of this new virtual currency.
It has become very common to purchase virtual goods using the Internet. Most people will buy and sell Bitcoin on the many online stores available for the product. If you want to trade your Bitcoin for something that is not available in physical form then you will find yourself dealing with “money mules” who are just simply trading the value of your currency for something else.
A Price Manipulation Investigation has been undertaken by the Bitcoin community and the FBI. There was a very good report released which suggested that one or two major traders were purposely manipulating the price of the currency in order to sell for a profit and then continue to hold the currency themselves, allowing their buying to not show up in the “real” market.
The two traders were interested in having both exchanges on their side, which resulted in one exchange having high volume and another one having low volume. This meant that they could use their own computers to connect between the two exchanges and manipulate the market. This resulted in the price of Bitcoin plummeting.
One of the biggest issues with a Price Manipulation Investigation is that people may not be reporting these incidents or being able to prove what was done. It is a common assumption that when a trader does something illegal or acts suspiciously that they will simply not say anything, but this does not seem to be the case here. In fact, one of the other main things reported were insider trading related activities, but again, there was no real proof to that effect.
Another reason why a Price Manipulation Investigation is not advisable is that there have been no cases where the currency was stolen or lost. This implies that these types of currency transactions were happening but with no ill effects. All traders should be aware of how the system works and follow the guidelines of a government agency. This way if they do get involved they will be working from within a team and able to make sure they can carry out the job effectively.
When dealing with Bitcoin you need to understand the principles of the currency exchange before you enter into any agreement. Only by doing this will you be able to enjoy the best benefits of the new virtual world of trading currencies.