Crypto prices are a dangerously misleading signal. Thin liquidity, wash trading, and insider coordination routinely manufacture fake demand, turning charts into marketing tools rather than reflections of real utility or value.
Unlike equities, tokens lack fundamentals and institutional arbitrage. There is no P/E ratio to reference or discounted cash flow model to triangulate against. As a result, speculation replaces valuation, and momentum flywheels drive prices to extremes, mislead investors, and distort developer and user behavior.
Consider the case of Mantra and its OM token. Behind the scenes, team members allegedly coordinated with market makers to simulate fake trading activity. OM tokens were passed back and forth between insiders, creating the illusion of robust demand. This practice deliberately engineered metrics that analysts rely on; on paper, the token appeared to be among the top 25 by market cap, yet in reality, less than 1% of the supply was genuinely traded.
Once this artificial volume lured in outside investors, insiders began offloading. Within 90 minutes, the token crashed 90% in value. Those behind the scheme walked away with profits, while retail investors were left holding near-worthless tokens.
In traditional markets, massive firms act as gatekeepers, keeping valuations in check. Crypto lacks this stabilizing force. Retail traders dominate, chasing momentum without any grounding in reality. This absence of institutional discipline creates a playground for manipulation.
Most token markets outside of Bitcoin and Ethereum are extremely illiquid. Even modest buying can move prices dramatically. Investors commonly misread manipulative buys as genuine signs of promise, creating a manic flywheel that drives valuations to absurd levels.
This dynamic blocks mainstream adoption. Manipulation erodes trust, punishes new entrants, and prevents crypto from becoming credible infrastructure. Until liquidity, regulation, or new mechanisms anchor prices to reality, the industry remains a hype-driven pandemonium where everyone eventually loses.
