As the volume in the cryptocurrency markets weakens, malicious actors are seeking new ways to profit. We have witnessed many projects that have harmed investors in the past, but today’s situation is different. Today, we see that market makers openly manipulate the market.
Warning to Cryptocurrency Investors
ZachXBT, one of the most famous blockchain detectives in the crypto world, recently issued an important warning. According to him, investors should be cautious against all projects that collaborate with the market maker Gotbit Hedge Fund. Gotbit claims that it will increase the price by 10 times during the first few minutes of listings to create FOMO (fear of missing out), and then sell a large amount of tokens during the subsequent price increase.
This is actually a well-known practice and is often seen in small-scale projects. Some crypto influencers make guaranteed advertising or demand guarantees after listings. They receive tens of thousands of dollars for the tokens they promote to their audience, and then dump all these tokens on unsuspecting investors in the secondary market.
Zach stated the following:
“I advise you to be cautious against all projects you see collaborating with Gotbit. A leaked report shows that the offered services are highly suspicious. They claim that they can increase the price by 10 times during the listing and collect liquidity for a major sell-off.”
“According to their website, they claim to have an office in NY.”
This market maker primarily serves low market value tokens, known as Gem Coins, which are notorious for victimizing investors.
Gem Coin Trap
Order books where cryptocurrency investors are victimized mostly belong to these types of cryptocurrencies. Due to their low market value, prices can increase tens of times after several million dollars worth of purchases. The subsequent demand comes from individual investors who take risks assuming that the rise will continue.
Even market makers, who are supposed to provide stability, have become so aggressive that investors should be even more cautious against these altcoins.
