We just saw a huge crypto pump in the last 24 hours, with a lot of the news stories being that, well, $3 billion of shorts were liquidated. And I'll tell you, this looks engineered to me. I'm going to explain to you how the engineering works and get you to ask better questions. To me, the question you should be asking is not, "Oh my God, how did people all get bullish all of a sudden? That's it, we're going up from here." The question you should ask is: who wanted to sell right now?
Because to me, almost everything in crypto comes back to intentional psychological manipulation, pushing narratives, and using financial tools to engineer the charts in the directions that favor insiders. In other words, almost everything in crypto is designed to rip off retail: to get crypto retail excited and buying high, then depressed and selling low, while the insiders do the opposite. So let me explain what we've seen in the last 24 hours and how it all makes perfect sense from the point of view of financial engineering.
What you need to play the game
First off, in order to play all these games, you need to be in a position of power: an exchange that holds a lot of people's Bitcoin, or some institution that's holding a lot of crypto and/or has a lot of cash. Then you have all kinds of research tools that tell you exactly where the leverage is in the market, the exact points at which liquidations will be hit, and where the market will make artificial money up and down.
Then all you need to do is wait for a favorable catalyst window. Because if you time everything correctly, your money can make huge moves happen for you, and you don't need a whole lot of money to do that. Lately we've had the Trump White House Crypto Summit pushing the Clarity Act, the SEC proposing new crypto offering rules, and the CFTC hearing, all scheduled in a relatively small window of time, along with what to me seems like a pretty meaningless thing the Fed is doing. And we ought to question why the Fed is even there in the first place, dictating our money supply when it is not an elected or governmental agency. Maybe that's the one question we all should be looking at.
If you put all these events together and you plan everything out, then all you need to do is wait for the right time and aggressively buy if you want to pump the market, or aggressively sell if you want to dump it.
Stop thinking this is haphazard
I want you to stop being emotional and thinking all these things are happening just because prices move. I want you to see how someone is sitting there calculating and coordinating all of this, playing the vast majority of people like a puppet master, just moving everybody's emotions. Look how easy this is to do. That will help you step back and question everything. Because somebody who has this amount of money is researching all of this; they're not sitting there going, "Oh, I don't know what to do." They're planning everything out to the last detail. It's ridiculous to think this stuff is just haphazard.
In fact, there are probably a number of people in positions of power who all work together on this stuff. When they have the events lined up, which they often do get lined up in exactly the right series, it goes like: "Okay, Trump's going to do this. The SEC is doing that. The CFTC is doing that. The Fed's doing this. Great. What we're going to do is, at this exact time, all at once, you buy, and I'll buy, and I'll buy, and we're going to spend a few hundred million dollars and all buy at the same time."
How the short liquidation cascade gets built
And then what happens? All the shorts get liquidated. But those shorts were seeded, because narratives are often meant to push people in the wrong direction. Most of the people on crypto are constantly telling you the exact wrong thing. They're telling you to be bullish when you should be bearish and vice versa. So the people who listen to all these fools take out positions thinking they're smart and have information, and then they're lined up in exactly the wrong direction, like sheep ready to get slaughtered.
When the manipulation comes in, you have all the shorts lined up in the wrong direction, or all the longs lined up in the wrong direction, depending on whether you want to buy or sell. And when it's time and the shorts are all lined up, you know exactly where the liquidation point is. You know exactly how much money you have to buy all at once to trigger the short liquidation, which will trigger a huge amount of additional buying. Then prices all go up, and people from the outside assume that something amazing just happened. They assign stories to it that totally ignore the manipulation that's really happening: that a small group of people used a relatively small amount of money, executed all at once, to buy all at once and destroy all the shorts. Then the shorts have to buy, and it causes this feedback loop where all of a sudden the price surges.
Selling into the pump and regression to the mean
Once you've done that, you're actually in a position to sell and take profits. Because if you can make huge moves on the chart happen, there's something called regression to the mean. If you get the price to go up all at once, it will often go back to where it was before, but it usually won't do that instantly, especially if there's any stability. And especially if you can get all the people who don't understand how this works, why it works, and that they're being played, to go buy Bitcoin right after it pumps. You get them looking at the price chart, and you know they're feeling emotion: "Oh my God, I've got to buy more before it goes up more."
Sure, sometimes there will be several repeated pumps in a row. In most cases, I would say those are orchestrated. There's a group of people who sit there and plan all this stuff out. They think you are completely unaware of it, which is probably true for most people. They assign narratives, they schedule all this stuff out, and they predictably make gigantic amounts of money. And then they predictably get crypto retail, and even other institutions that aren't in on it, to lose money over and over in the market.
"Oh my God, Bitcoin just surged. Let me get some before it goes up." And then what happens? Manipulated pump back down. And when it goes down, people are like, "Oh my God, I better sell and wait. It's going to go down further." And then manipulated pump back up. "Oh my God, I need to buy. I need to buy. I need to buy." The people on the inside are stealing hundreds of billions of dollars through what I would call intellectual and emotional theft. This is all very easy to see in action once you understand that this, to me, is the real picture. Because as soon as you get a big pump like this, you can sell right back into that liquidity, since often when a price chart goes up, a lot of people just buy when it's green and sell when it's red.
Regulators already know this happens
What I'm describing is not imaginary. Regulators have repeatedly dealt with crypto market manipulation. The CFTC explicitly warns that digital asset cash markets face manipulation risk, and the SEC has brought cases against market makers using wash trading and algorithms to manufacture artificial volume. There's even a recent comment from the CFTC on perpetual futures that describes the exact vulnerability I'm talking about here.
How I invest instead
The key with all of this is that your investing (and this is not financial advice; I'm all in on ICP because it's the most real thing in crypto) should be logical, researched, and pretty cold-hearted, but it should be backed by a love of the technology and the fundamentals of whatever is there. It should never be because something pumped or because something dumped, because those are easy to manipulate. That's what I'm talking about here: predictable profits for insiders in each direction. You can even make more profits if, let's say, you know you're going to do this; then you could take out longs against all the shorts, buy into it, and make a bunch of money on your longs too. It's nuts how much money you can make from the inside rigging all of this up. It is naive to think that this doesn't happen, and naive to think that it isn't normal. I believe this is what happens, and that there are hardly any pumps that don't fall into coordinated manipulation.
I hope my videos help you to be smarter. I hope my videos help you to question everything and to learn to see how you get played. From there, you can be smarter. From there, you can avoid getting sucked into the emotions of green candles or red candles, and you can find the best investments in crypto and sit in those regardless of the candles that come on a day-to-day basis, like I do with ICP.
If you enjoyed this, I invite you to join me on the blockchain at jerrybanfield.com, a fully on-blockchain business system only possible on ICP. If you want to talk with me, I read all the comments in my chat, and I read none of the comments on YouTube. You can get lifetime access to my chat with both crypto and cards, and you can ask me anything at any time.
If you want more breakdowns like this one on how the market really moves, I cover coins, pumps, and dumps like this all the time in my Crypto Reviews playlist.
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Thank you for watching. I hope to get to know you in the Jerry Banfield chat and shout you out on the Jerry Banfield leaderboard as a thank you to all of you who've bought the chat and supported me since I launched it in the last week or two. I'll see you in the next video.