Hypocrisy in Cryptocurrency world and why the financial industry loves it







By Avinash Shenoy, UK

I find it sad when I read rally cries akin to ‘Viva la résistance’ and down with the Global Financial Oppressors because Bitcoin will soon free us from their centuries of oppressive regime (I use Bitcoin in this post as it currently has market dominance). This is because in the very next sentence I see people buying into the hype of Bitcoins price Mooning* to $50,000 by the end of this year, and then $1Million by 2020 courtesy of the notorious John McAfee.

These people buy into these predictions (self-fulfilling?) and put their hard earned savings into something endorsed by the early adopters who have already made their fortunes and are now promoting and manipulating this market for their own gain.

There seems to be a disconnect between what people claim to be behind the underlying technology, that is, Blockchain, and their blatant greed of pumping the price of the cryptocurrency by whatever means possible, even if it means allowing the very same financial institutions in and slowly take over this marketplace.

The simple truth is this: there seems to be no genuine revolution. Hypocrisy is rife in the air. We talk as if we are experts on forums to our friends (anyone who will listen really) about the utopia of using cryptocurrencies for our daily needs, how it will be commonplace and that Fiat (Rs, $, £, etc.) will be overthrown. However, in reality, we are squirrelling away Bitcoin into our wallets, waiting for that $1million/BTC prediction to come true so that we can exchange it for Fiat immediately, try to evade taxes and go live on our private island sipping Mai Tai’s while getting foot rubs all day long!

Image Source: (Vraukt, 2017)

Now if we believe that WallStreet, other financial organisations, various governmental institutions around the world have been sitting on their hands, twiddling their thumbs and have just woken up to cryptos and their potential, then we are grossly deluded. It would be naïve not to assume that they have been watching the whole experiment unfold since day one and been waiting for the ideal point to enter the market and then regulate, control and maximise their profits in the long run.

For example, Poloniex, one of the largest exchanges in the crypto universe was bought by Circle, a company backed by Goldman Sachs which is one of the most prominent Wallstreet Financial Institutions.

Now the very same Goldman Sachs with very close ties to the US Government announced a few months ago that it will start Bitcoin Futures trading via cryptocurrency trading desk and in doing so will add legitimacy to Bitcoin. This sent pre-teen shrieks of delight through the crypto community with the expectation of a similar price appreciation to late 2017. Today the very same Goldman Sachs has backed down from its earlier statement of creating a crypto trading desk, and this immediately plunged the price of Bitcoin from $7,500 to around $6,200 in a few hours (most of which under 30 minutes) (Berman, 2018).

Image of the crash:

Image Source: Blockfolio (Blockfolio, 2018) portfolio manager using Kraken Marketplace Data (09/06/2018).

The unusual thing was this plunge happened before the news was released which indicates manipulation. In fact subsequently, an article was published which demonstrated this manipulation of Bitcoin using Artificial Intelligence quite clearly with data to back it up (Adsitt, 2018). This can be seen in the images below:

Image Source: (Adsitt, 2018)

Image Source: (Adsitt, 2018)

But the thing is we most definitely do not need banks to provide legitimacy to Bitcoin as Carl Monroe correctly states: “This was not the point at all. How does the bank that Satoshi** wanted to bring down, bring legitimacy to his legacy exactly?” (Selene, 2018). Let’s face it banks are not interested in adding legitimacy to anything. And with (CBOE and CME) also trading Bitcoin futures, who do you believe, in the long run, with such financial instruments and exchange takeovers, are the real benefactors? If anything I see this as a hostile takeover of cryptocurrencies by the very organisation that Satoshi set out to liberate us from.

This is not so far-fetched when you consider people are also proud of the concept that Bitcoin is Decentralised and not ‘controlled by anyone’. However, this can be seen as also that ‘no one is responsible’ for Bitcoin which is not such a good thing. Without some measure of responsibility of ownership, in a Decentralised network, you are potentially open to a takeover by someone like a group of Financial Institutions. This is especially true when everybody in the crypto universe is fighting over which coin is the one to rule them all!

In addition to the above problem the presence of ‘Whales’ (who are high net-worth individuals) in this market, a roughly estimated 1,000 people who own 40% of all Bitcoins (Kharif, 2017) could very easily conspire to manipulate the market through the use of coordinated trading bots and the use of social media. A potential scenario is driving up the price of Bitcoin, betting against the Futures market, cashing out all at once and inducing a price crash (rinse and repeat). Which is what you are probably witnessing right now!

A table of the current Bitcoin Rich List is below:


Source: (BitInfoCharts, 2018)

As you can see from the above table 123 addresses, control 20.09% of the Bitcoins currently in distribution. This is just over $23 Billion.

The lack of regulation in the cryptocurrency market allows this kind of manipulation to go unpunished and those with access to privileged information to profit at our expense.

At the end of the day all of this greed on our part, lack of regulation (allows easy manipulation), the introduction of a Futures market which minimises counterparty risk and increases liquidity for the financial players (compared to OTC)- it is the financial markets dream come true!

I don’t know what the long-term answers are…. But in the short term, I am a firm believer in understanding your opponent. Get to know finance, other asset classes and what actually constructing a portfolio is really about. The effort involved is as comfortable as reaching for your keyboard and searching excellent sites such as investopedia.com for concepts and tutorials.

But, listening to self-proclaimed “experts” who throw around some buzzwords and produce a derivative Technical Analysis on YouTube is indeed not the answer.

(In the interest of full disclosure: I HODL*** Bitcoin (circa 2012) and other Cryptocurrencies since. I also participate in the traditional Financial Markets and believe in having a balanced portfolio of assets)


*Mooning in the cryptocurrency world refers to the price shooting up dramatically! For more terminology: https://cryptominded.com/glossary-cryptocurrency-terms-need-know

** Satoshi is Satoshi Nakamoto the unknown person or group who developed bitcoin. For more information see: https://en.wikipedia.org/wiki/Satoshi_Nakamoto

***HODL is basically an adoption by the cryptocurrency community of HOLD which originated from a drunken Reddit post which can be found here: https://bitcointalk.org/index.php?topic=375643.0. It is also humorously referred to as “Hold On for Dear Life”.


Adsitt, K. (2018, September 05). This AI Tracked Unusual Market Behavior Before Today’s Big Crypto Drop. Retrieved from CCN: https://www.ccn.com/unsual-cryptocurrency-market-behavior-before-big-crypto-drop/

Berman, A. (2018, September 05). Business Insider: Goldman Sachs Drops Plans to Open Crypto Trading Desk. Retrieved from Coin Telegraph: https://cointelegraph.com/news/business-insider-goldman-sachs-drops-plans-to-open-crypto-trading-desk

BitInfoCharts. (2018, September 06). Bitcoin Rich List. Retrieved from BitInfoCharts : https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html

Blockfolio. (2018, September 06). Retrieved from Blockfolio: https://blockfolio.com/

Kharif, O. (2017, December 08). The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market.
Retrieved from Bloomberg: https://www.bloomberg.com/news/articles/2017-12-08/the-bitcoin-whales-1-000-people-who-own-40-percent-of-the-market

Selene, A. (2018, August 25). Goldman Sachs Adds Legitimacy To Bitcoin; The Wall Street monolith wants to reposition itself as a financial innovator. Retrieved from https://cryptobriefing.com: https://cryptobriefing.com/goldman-sachs-adds-legitimacy-to-bitcoin



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Comment on this article

  • Stevan Menezes, Shirva/Mumbai

    Wed, Oct 10 2018

    DK soon going to be hit with a Crypto currency scam. Many youngsters have invested in 'Buxcoin', a scheme headed by Moshin Jameel operating from Malaysia or Thailand.

    Moshin Jameel is wanted by the Chandigarh Police in connection with a Chit Fund Scam. (read all about it in the Google search). I have personally adviced the people I know who have invested in this scheme not to add any members in this scheme or else they might face trouble with the people and will have to pay from their pockets.

    DisAgree Agree [5] Reply Report Abuse

  • Avinash Shenoy, UK

    Fri, Dec 07 2018

    Dear Stevan,

    I just picked this message up, so please accept my sincere apologies for the delay in response.

    What you are doing is a positive thing for the greater good of the community. I am glad to see that there are sensible people out there who demonstrate an authentic desire to prevent unnecessary suffering in others.



    DisAgree Agree Reply Report Abuse

  • Avinash Shenoy, UK

    Sun, Sep 09 2018

    Hi Robotkem,
    These are excellent questions that you ask and are currently being debated hotly across the globe in Governments, Financial Institutions and the Users themselves. As it stands, I don’t think we are at a point where we have all agreed upon what the right answer actually is!
    I believe this is because apart from being practical points (INFRASTRUCTURE, SAFETY AND SECURITY), they are a point of individual perspective and philosophy to each of these groups. It is the age-old question of ‘Cui Bono’ or who stands to gain the most from something being implemented? We also need to answer the questions of who stands to lose from something being changed or enforced.
    Obviously, these are just a couple of areas, and I am sure you know the scope of the topics we would have to cover to answer this question fully!
    I am sure you appreciate my article is addressing a philosophical point of view and the aim was to raise essential questions in the mind of my readers like the one you have asked.
    Thank you for bringing these critical areas to our attention.

    DisAgree Agree [8] Reply Report Abuse

  • sri_elder, Karkala

    Sun, Sep 09 2018

    If this bitcoin is so much valid then why would miners go and sell it for dollars? Profit booking is the main thing!

    First thing miners should give bitcoin loans.. Then people starts using it. Finally loans should be waived off! No exchange for other currency

    DisAgree Agree [6] Reply Report Abuse

  • Avinash Shenoy, UK

    Sun, Sep 09 2018

    Dear sri_elder,
    Thank you for this valid point, and I totally agree with you about why would anyone sell Bitcoin for Dollars or any other currency!
    I am sure you have read through my piece which expresses the ironic state of affairs in this industry. Also, I am sure you understand it is not meant to address technical issues- more philosophical ones.
    It is always good to hear from you and thank you for your comments.

    DisAgree Agree [3] Reply Report Abuse

  • Robotkem, Kemmannu

    Sun, Sep 09 2018

    One of the commentators , was speaking about BITCOIN AND CRYPTOCURRENCY , expect to shed some light/thoughts on this subject WITH the above reference article.


    DisAgree Agree [4] Reply Report Abuse

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