Unleashing the Power of Force Multipliers: How Markethive Amplifies Your Business Success

Entrepreneurs encounter many challenges that can impede their businesses' progress and prosperity. However, force multipliers such as technology, tactics, resources, software, and partnerships can enhance effectiveness and achieve significant results even with limited resources. Markethive, a social neural network, provides a range of force multipliers, including information and content sharing, user-generated content, blockchain technology, storefronts, campaigns, brand ambassadors, awareness of the market, and network connectivity. These force multipliers can expand a business's reach, influence, and development, making Markethive an invaluable asset for entrepreneurs.

The challenges that entrepreneurs encounter can hinder their businesses' long-term success and growth. One common obstacle is figuring out how to effectively utilize the limited resources at their disposal, whether time or money, to achieve the most significant impact and profitability. This is where force multipliers come into play. It is essential to understand what force multipliers are and how powerful they are in addressing these challenges.

The armed forces have long understood the importance of force multipliers. A troop multiplier, for instance, enhances an existing military capability by either increasing its size or utilizing machine guns as force multipliers for rifles. The military would integrate sniper training into various subjects to enhance the value of snipers as a force multiplier and ensure their survival in combat.

Force multipliers are a means to accomplish more remarkable results with the same or reduced amount of effort, similar to how using a drill instead of a screwdriver can make tasks more manageable. These force multipliers can be vital in ensuring the business's survival.

What Are Force Multipliers In The Online World?

In the digital realm, force multipliers refer to the various methods, techniques, technologies, and resources that can significantly enhance your business's competitiveness and give you an edge over your rivals. These force multipliers can help amplify your online presence, streamline operations, and ultimately drive success in the digital marketplace.

Utilizing force multipliers has enabled many entrepreneurs to experience rapid and substantial growth, leading to outcomes that would have been unattainable through other means. By leveraging these tools, you can rapidly scale your efforts and unlock opportunities that otherwise remain out of reach.

Combining these elements creates a powerful effect and dramatically enhances the outcomes for the company, its clients, and the overall economy. By leveraging its strengths, a smaller entity can gain an unfair advantage over a larger, more established competitor with a similar business model, creating a force multiplier effect.

The military interpretation mentioned earlier emphasizes the importance of enhancing capability. Markethive, on the other hand, prioritizes the addition of processes as we aim for the combined marketing elements to unite and surpass the overall marketing endeavor synergistically. Unlike in many other institutions, force multipliers typically serve to optimize store operations or manufacturing productivity.

Marketing force multipliers stem from strategic and procedural innovations that enable businesses to adapt to the rapidly transforming landscape. Outdated linear approaches are no longer practical in today's dynamic market, where retailers and brands must respond to changing consumer behaviors and technological advancements. By embracing new strategies, marketing teams can capitalize on the explosive potential of force multipliers, allowing them to stay ahead of the curve and achieve tremendous success.

Any company seeking expansion must discover its unique Force Multiplier. The hurdle is determining which specific factors will boost your business's growth.

The marketplace is in a state of constant flux, with no shortage of influences impacting it. This highlights the importance of recognizing the factors that can amplify the growth of your brands. These factors must be identified and nurtured. Listed below are Markethive’s force multipliers, which are crucial for online businesses. 

Image: Markethive.com

Force Multipliers In The Digital Realm 

Sharing Info And Content On Social Networks

The speed and interactivity of sharing information and content on social networks is an essential tool for Markethive entrepreneurs. The diverse range of social media platforms available allows for extensive reach and connectivity. These platforms work harmoniously with the Markethive social media platform, enabling a tailored, individualized, interactive collaboration experience.

User-generated Content Attracting Feedback and Reviews

Entrepreneurs can benefit from the immediate sharing of user-generated content, but they must also be prepared to handle feedback and ratings from online users. While this can be a powerful tool for growth, it can also be detrimental if the entrepreneur is not receptive or dismissive of their customers' opinions. To effectively manage online feedback, being attentive and understanding of one's audience is crucial.

Fostering Advocacy: A Key to Success

Advocates should be nurtured. It is vital to cultivate advocates as they serve as an invaluable asset. They are passionate supporters and allies who strongly believe in your brand, cause, or product. These individuals willingly put in the effort without compensation. They become influential figures who can sway the opinions of undecided individuals. They engage in conversations with others and act as a catalyst in building customer loyalty and involvement.

Real-time Situational Awareness and Strategic Network Connectivity 

By leveraging a robust network of connected individuals and groups, your business can stay ahead of the curve and respond promptly to evolving market trends. With the right people and information in place, you'll be empowered to make informed decisions quickly, giving you a competitive edge. 

This proactive approach is a potent force multiplier that enhances your company's situation awareness in real-time, allowing you to stay adaptable and responsive in an ever-changing landscape. This strategic networking capability is an indispensable component of your marketing strategy, enabling you to stay ahead of the competition and achieve long-term success.

Harnessing the Power of Predictive Insights

The ability to forecast forthcoming changes holds immense potential, yet many organizations still need to catch up to adopt data-driven strategies. While some industries, such as law enforcement and healthcare, have embraced predictive analytics to anticipate security concerns and resource needs, many companies still need to utilize this powerful tool. By harnessing the capabilities of predictive intelligence, organizations can gain invaluable insights to preempt changes and stay ahead of the curve.

A network must capitalize on emerging trends and directions. Predictive analytics, such as analytics for anticipating short-term and long-term change, is a powerful tool to recognize trends and requirements at all times. It embodies a culture of innovation.

Storefronts and Campaigns

At Markethive, we offer powerful tools to help entrepreneurs amplify their reach and impact. Our storefronts and associated marketing campaigns are designed to work together seamlessly, providing a force multiplier effect that helps businesses grow and thrive. Additionally, we have integrated broadcasting capabilities that allow group administrators to easily share information with the entire group's social network, further expanding the reach of your message.

The blogging platform is designed to streamline team collaboration and provide comprehensive management reports for administrators. These reports offer visibility into individual team members' activities, including blog posting, autoresponder creation, capture page development, news feed posting, ad management, and new member sponsorship. Additionally, the system features a group rotator that showcases the collective traffic generated by the team and a cooperative mechanism for raising funds and shares to support group advertising campaigns.

Blockchain Technology

Blockchain and smart contracts offer a pivotal advantage by amplifying the impact of crowdsourcing. These innovative methods provide a cost-effective way to incentivize and reward individuals contributing to crowdsourcing initiatives. Entrepreneurs can bypass traditional sources such as professional investors and venture capitalists by obtaining funding directly from the crowd. This enables them to finance the development of new platforms that cater to users' requirements. The Incentivized Loan Program (ILP) serves as a prime illustration of this concept.

Image source: Gotco.in

Cryptocurrency

Users are rewarded with cryptocurrency micropayments for participating in various activities just using the systems on the platform. It creates a fun, engaging, rewarding, and profitable experience. This approach also utilizes gamification elements, with loyalty and bounty programs, to incentivize users and make their engagement even more valuable. The result is a dynamic that amplifies the impact of users' efforts and transforms how they interact with the platform.

Markethive’s Hivecoin (HVC) is alive and well on the official Hivecoin mainnet faucet. Increase your HVC portfolio by visiting the Hivecoin Faucet website daily to receive your free crypto. You just need to paste your Markethive wallet address in the bar, fill in the capture, and claim. You’ll receive 0.00001 HVC in usually a few minutes, up to 3 days. Also, be sure to bookmark the site and visit it daily to accumulate your HVC. This is a powerful force multiplier that increases the transactional activity required to meet exchange protocols. 

Amplify Your Reach with Force Multipliers

It is essential to utilize force multipliers to achieve expansion. Suppose you solely focus on targeting one customer, market, or partnership at a time. In that case, your growth will be limited, and you won't be able to compete effectively, especially against larger competitors with a well-established market presence. By employing force multipliers, you can accelerate your growth, increase scalability, and capitalize on opportunities that would otherwise be out of reach.

Constantly seeking ways to enhance productivity is crucial for businesses and marketers. Given our limited resources and time, it's essential to identify the most effective multipliers for each element to optimize results.

Infographic: Markethive.com

Markethive: What’s In A Name? 

The term "market" encompasses a comprehensive collection of effective inbound marketing resources, such as automated email responders, social media broadcasting tools, landing pages, blogging platforms, search engine optimization tools, lead management systems, and analytics.

The term "hive" refers to the social network present in the system. It is an innovative form of social network known as a Social Neural Network. This concept of a "Hive" offers unparalleled potential for campaigns to capitalize on the network effect, with effortless management and unbridled impact.

Irrespective of your motivation level, Markethive will enhance your schedule, expand your outreach, and create a larger and more impactful sphere of influence than any other platform has ever tried to achieve.

Markethive is an innovative platform that fuses the features of LinkedIn, Facebook, Marketo, and Fiverr, all while utilizing the cutting-edge technology of Blockchain. By doing so, it offers a comprehensive set of Inbound Marketing tools seamlessly integrated into a user-friendly social network. And the best part? It's free to join and even rewards you for participating!

Within Markethive, a thriving cottage industry has given rise to numerous independent businesses as the Markethive entrepreneurs capitalize on the opportunities presented by the platform. Markethive's money machines, such as the Banner Impressions Exchange (BIX), empower associates to harness the system's potential and achieve financial success.

Markethive is in the throes of incorporating more revenue-generating components, such as the E1 Exchange and Promocode. Additional components, referred to as hubs and portals, will be integrated in due course. They are diverse in nature and can also be considered force multipliers, amplifying earning potential.

Just like any other platform, upgrades offer additional features, such as the Entrepreneur One Upgrade, with more entry-level upgrades coming, like the Premium Upgrade launching soon. As a free member, you'll have access to various essential tools for inbound marketing. Plus, you'll be in our thriving social network and even earn crypto rewards, such as micropayments in Hivecoin for your activity on the platform, once you refer three friends or colleagues to join markethive. This article explains more about the referral program. 

We have here the world's first entrepreneur business person's social network, with the entire system offered predominantly for free to the worldwide entrepreneurs market. With the integration of the new streamlined dashboard and various newsfeeds currently in development, the complete system is next-level, clean, and intuitive, delivering every function and aspect available, fitting for the entrepreneur, business, and corporation. 

It encompasses a diverse range of entities, from small, local businesses to global corporations, including cottage industries, real estate and mortgage agencies, insurance providers, affiliate marketers, software developers, musicians, religious organizations, political parties and candidates, distributors, network marketers, innovators, and visionaries.

Cut expenses, boost profits, and expand your online presence with Markethive. This powerful platform allows you to amplify your reach, grow your audience, and increase your revenue stream without breaking the bank. There is no need for expensive internet marketing costs but an increasing need for a more efficient and effective way to achieve brand and financial success and sovereignty in the parallel economy. Markethive is the ultimate Social Market Broadcasting Network and the home of technology-driven Force Multipliers. 

May the force be with you. 

David https://markethive.com/david-ogden

6 Steps To Unlocking Crypto's Full Potential: Markethive's Contribution to the Cause.

Although Bitcoin has existed for 15 years, the crypto industry is considered relatively nascent, and it’s frequently stated as still in the early days, meaning that many coins and tokens still have huge potential. Many believe this is somewhat underestimated. In perspective, the total market cap of stocks is $90 trillion, the total market cap of precious metals is $15 trillion, and just the US Dollar is over $20 trillion. The total market cap of crypto is only around $1 trillion, and considering some coins and tokens could someday become serious competitors to stocks, metals, or even national currencies means that crypto still has unprecedented potential. 

This article explores the six steps to achieving crypto’s full potential, how it will achieve this potential, what entities are moving forward, and how significant the returns could be. We’ll look at where we’ve come from and where we are heading and discover the critical component that brings this whole approach together. 

Image source: Finoa.io

Awareness and Education

The first step to achieving crypto's full potential is awareness and education because crypto can only receive investment or achieve adoption if people know about it. It can only receive investment or achieve adoption if people understand how it works and its value. Awareness of and education about crypto needs to be improved, as most of the attention either comes from mainstream media, arguably biased and aligned with the financial establishment, or from misleading advertisements, promotions, and partnerships, often from explicitly pro-crypto entities. 

Much of the education has also come from questionable sources, with most media outlets and influences pushing content purely to get clicks or token allocations. The result is that there is a general shortage of quality information about crypto, but this is improving. People are looking for quality information about crypto, and it’s increasing.

Another reason there’s been a lack of genuine education in crypto until now is that it's often more profitable to do other kinds of crypto content in the short term. It has given cryptocurrency an unfavorable reputation and is especially tough for those genuinely trying to educate others, but this seems to be slowly improving, too.

Some crypto content creators and influencers have taken shortcuts, finding themselves under the scrutiny of the SEC, while other countries have recently enforced strict regulations around crypto marketing.  As concerning as some of these regulations are, they are arguably necessary to ensure that the next wave of crypto content creators and influencers focus on crypto content with long-term value. 

Markethive, an entrepreneurial ecosystem, is a platform at the forefront of this shift as a next-gen crypto media outlet that champions free speech, focusing on genuine crypto content and education. The overall crypto landscape is at the beginning stages. Still, by the time the next crypto bull market hits, the quality of crypto awareness and education will be much higher than it has been, which will set the stage for crypto to reach its full potential. 

Crypto Regulation 

The second step to achieving crypto's full potential is regulation. It ties into the first step because regulators must know about crypto to write reasonable regulations. Institutional investors also need to be aware of and educated about these regulations. As we've seen, regulators worldwide are both aware of and educated about crypto for the most part. This is fortunate or unfortunate, depending on the jurisdiction in question. 

It's becoming clear that some are pushing for pro-crypto regulations while others are pushing for anti-crypto regulations. Believe it or not, any crypto regulation will benefit the crypto market if it doesn't involve an outright ban. This is just because investors, notably institutions, will finally have some guidance about what they can and can't do with crypto in their country. And once these investors and institutions get involved, you can bet that they will lobby to improve crypto regulations to suit their needs better. 

The crypto industry has already been lobbying but with mixed results. By contrast, Fidelity privately lobbied the SEC to approve a spot Bitcoin ETF in September 2021. For context, Fidelity is one of the largest asset managers in the world. It was arguing with an anti-crypto regulator behind closed doors, which is highly bullish. 

In retrospect, it's possible that Fidelity's lobbying is why Black Rock became encouraged to file for a spot Bitcoin ETF in June 2023. More importantly, Fidelity's past lobbying and Black Rock’s present SEC filing suggest that these lobbying efforts will only increase. This will ultimately be a net benefit to the crypto market. 

Institutional Investment

The third step to achieving crypto's full potential is investment from institutions and high-net-worth individuals. Of course, these entities hold most of the world's wealth. This is a consequence of having currencies whose supply is manipulated by people in power. Like all investors, institutions and high-net-worth individuals ultimately want to maximize their returns. As it happens, Bitcoin’s BTC is estimated to be the best-performing asset of all time, from an initial price of $0.09 to all-time highs of over. $69K, BTC has pulled a 760,000X return. 

Image source: Bitcoin’s Price History

Like all assets with such high returns, BTC’s returns will likely diminish over time, but it will still ostensibly outperform most other assets for the foreseeable future. This fundamentally depends on how much BTC we'll see in inflows. Although this is impossible to predict, there is one benchmark to remember; 

BTC is considered by many investors, including Black Rock, to be digital gold. As a result, it's generally believed that BTC’s market cap will someday be similar to that of gold. Now, gold's market cap currently sits at around $13 trillion. BTC's market cap is currently sitting at approximately $500 billion. So, BTC catching up to gold would mean a 26X increase in its price. This would translate to a BTC price of around $670,000. 
 
Interestingly, BTC’s peak price of $69K put its market cap at around $1.3 trillion, around 10% of gold's total market cap. This assumes that BTC is analogous to digital gold. Some have argued that BTC has additional value since Bitcoin is technically the most secure network in the world. It makes it the ideal base for other ecosystems, including payments, which the likes of the Lightning Network can support. On the topic of payment networks, smart contract cryptocurrencies are the ones that will capture this market share. It means that they could someday displace payment processors and other financial intermediaries. 

The total market cap of these financial intermediaries is over $2 trillion. Given that the market cap of Ethereum’s ETH is currently around $200 billion, matching analogous companies would mean a 10X increase in price. It translates to an ETH price of over $15K, but this likewise assumes that Ethereum is just a payments network; it is obviously much more than that. As such, one could argue that Ethereum is still near the beginning of its adoption curve. 

Crypto Adoption

The fourth step to achieving crypto's full potential is adoption. For reference, it's estimated that less than 5% of the world currently holds crypto. This implies that should more people choose to hold crypto, its price should have excellent upside potential. However, holding crypto is not the same as using crypto. Holding it constitutes investment effectively, whereas using it is actual adoption. 

On-chain data for the largest cryptos suggests there are only a few million daily users, a mere fraction of the world's population. Therefore, potential gains are even more significant than expected by merely extrapolating hodlers. For those unfamiliar, there are ultimately three reasons why people adopt crypto. The first is for profit, the second is for fun, which is very much intertwined with the first reason, and the third is out of necessity. This third reason has resulted in most of the actual crypto adoption. 

For example, 50% of Nigeria's population uses crypto daily, primarily because the government can't be trusted. This phenomenon is not unique to Nigeria; it's an accelerating trend worldwide. Considering that most central banks are currently rolling out Central Bank Digital Currencies (CBDCs), it becomes easy to imagine a world where the average person starts looking for alternatives to a digital currency controlled by institutions they don't trust. 

The demand for such alternatives is already increasing among some governments. The so-called Global South is looking to move away from the US dollar, and some reports suggest that crypto could be a part of their escape plan. Some countries already use crypto for international trade, and Russia is considering mining its own crypto. 

So, just like the adoption process at the individual level, the adoption process at the national level will eventually involve nations and national activities. Using crypto for things like international trade will become more accessible to the average country. At the same time, the tendency to weaponize fiat currencies will be increasing, and this will increase the demand for credibly neutral currencies. Decentralized cryptos like BTC could play a key role. 

Crypto Innovation

Crypto Adoption will ultimately depend on the progress of crypto innovation, the fifth step to achieving crypto’s full potential, particularly around user experience and privacy. Logically, it will be hard for individuals and institutions to adopt crypto in any meaningful way if they need to struggle with hardware wallets. 

Image source: Coursera.org

Significant developments have been on this front, the most notable of which is the gradual merging between hardware and software. It might sound bizarre, but a crypto phone like Solana Saga could solve crypto wallet User Interface (UI) and User Experience (UX). It's not just wallets, either. A lot of innovation is happening at the blockchain level. 

For instance, Ethereum’s EIP 4337 upgrade from earlier this year will allow any phone to have crypto phone-type properties, mainly hardware wallet-level security. It will also make it possible to create dApps with no gas fees or, rather, dApps where the user doesn't have to pay the gas fee. 

Constantly checking and accounting for transaction fees is another considerable hurdle to crypto adoption, which many crypto projects attempt to overcome. This will require entirely new approaches, such as charging crypto users monthly subscription fees to use a blockchain rather than charging them for every individual transaction. Of course, some of these approaches will require entirely new types of hardware, like more interactive hardware wallets.

Crypto Privacy

Crypto privacy is another niche to watch out for. Privacy in crypto has been a touchy subject. In one respect, crypto transparency is a huge advantage. At the same time, some degree of privacy is required for financial freedom, and high-net-worth individuals demand it. When it comes to the incessant third hand of government, there's a desire to exploit crypto’s transparency to track transactions and label any crypto privacy attempts as inherently encouraging criminality. 

For the crypto industry, balancing transparency with privacy presents a challenging problem. Zero-knowledge proofs have emerged as one potential solution to this problem, but they come with other problems. The primary one is ensuring that these zero-knowledge technologies don't have secret back doors. Thankfully, this is an issue that can be addressed.

Image Source: Developers:Circle.com

Regardless, the problem of balancing transparency with privacy is closely related to the problem of identity. Countries are pushing for digital IDs, and global regulators want to see these digital IDs integrated with cryptocurrency. The crypto industry has been working on its own supposedly decentralized digital ID solutions; however, these digital ID Solutions are just as centralized as the ones from governments. What's needed is a truly decentralized digital ID. 

There haven’t been any significant developments yet; however, the innovations around wallets and privacy continue rapidly and should be in place by the time the next crypto bull market comes around. This will further facilitate crypto investment and adoption at individual and institutional levels. 

Decentralization

Cryptocurrency's final step to achieve its full potential is complete decentralization. Without decentralization, everything that I just mentioned is off the table. That's because if crypto is centralized, it can be controlled, and if it can be controlled, it'll end up like our existing systems—news flash: Crypto's entire purpose is to replace our current systems with something better, starting with our monetary and financial systems. Naturally, the technology that underlies crypto is compelling. The only way it won't fall into the wrong hands is if it's genuinely decentralized. 

This article illustrates that decentralization means more than having many validators or miners. It means having a decentralized developer base, a decentralized coin or token distribution, a decentralized infrastructure layer, and a decentralized blockchain. Ultimately, this also means having a truly decentralized internet. 

Luckily, the Internet is somewhat decentralized and will likely become more decentralized as peer-to-peer Internet crypto projects like Helium see more investment and adoption. This also pertains to Markethive as it strives to decouple from all centralized entities prevailing as a tour de force in its next-gen social market broadcasting media niche. This adoption is necessary due to internet censorship. 

Currently, most cryptocurrencies are arguably not decentralized enough to evade control. It stands to reason, then, that these cryptocurrencies will not be the ones that make it. In other words, if you hold centralized cryptos, you're not early; you're late, very late. That said, this depends on whether the centralized cryptos you currently hold can become decentralized. To figure this out, you must ask one question: Is this crypto capable of building its own infrastructure and ecosystem without relying on a single set of individuals or institutions? 

Image Source: X – The DeFi Edge

Crypto Funding

The answer for most cryptos is no; however, that's not entirely their fault. One perspective is that one of the primary reasons why so many cryptos are so centralized is because of funding. Early investors in crypto projects want to see returns and often try to control the project to that end. This incentivizes crypto projects to cut corners on decentralization to ensure their investors are quickly rewarded. As we've seen, these so-called VC coins have seen the most aggressive pump-and-dump cycles, and most of them probably won't last past the next crypto cycle. 

The silver lining to this situation is that it fully displays the solution to the crypto centralization problem. The crypto industry needs to find a way to fund crypto projects in a more decentralized manner. 

Image by Markethive.com

Decentralization of Social Market Networks

Markethive is the ecosystem for entrepreneurs and a crypto project with the solution to top-level control issues, whether it be funding or the systems driving it. It is a decentralized, limited AI-secured rating and reputation system that is self-policing and a Human Intelligence (HI) that fosters a healthy level of meritocratic interaction. The community solely funds it with no prominent venture capitalists. The people are building it; it is of the people and for the people, so the community will profit, sharing the prosperity and abundance of every level of humanity.

It also creates a breeding ground for positive, creative, and beneficial content in which people's minds are prompted toward positive growth and critical thinking. Markethive is beyond its crypto wallet and Hivecoin release milestones, disengaging unreliable APIs and implementing multiple servers in preparation for its mining hives that give peace of mind—making it an impenetrable fortress against what has become a jungle, and a cesspool of fraud, scams, data harvesting, political bias, and dystopia. 

This divinely inspired project is all part of the Web 3 or 3rd generation Internet, which has emerged as a movement away from the centralization of services. Markethive is here for the rank and file with entrepreneurial aspirations at little to no cost to join. The all-encompassing social market broadcasting network delivers financial sovereignty, freedom of expression, privacy, and autonomy. We have entered into the much-needed world of decentralization, where the cancel culture is no longer an existential threat.  

At the time of writing this article, we are perfectly positioned to take advantage of the opportunities that are coming. Markethive, with its Hivecoin (HVC), will be poised for the next crypto bull run and participate in the facilitation of crypto achieving its full potential, where we’ll see HVC firmly established as a coin with purpose and utility in the free market. Do you want to be part of the decentralization revolution? Today, become an ‘Entrepreneur One’ and reap the rewards of Markethive’s ILP and revenue returns.  

May God bless and uphold you for all eternity…

David https://markethive.com/david-ogden

The Dark Secrets Behind Crypto Market Manipulation

Cryptocurrencies have been at the center of extensive debates in recent years, with much of the discussion revolving around their value and regulatory aspects. However, there is a pressing need to delve into the issue of market manipulation, with a particular focus on the behavior of cryptocurrency exchanges.

The spotlight on crypto and market abuse intensified in late 2022 following the collapse of FTX. This exchange, which had, at one point, held the position of the world's third-largest cryptocurrency exchange by trading volume during its three-year existence, experienced a dramatic downfall. Its founder and CEO, Sam Bankman-Fried, now faces a series of serious charges, including conspiracy to commit commodities and securities fraud and conspiracy to defraud the United States and engage in campaign finance violations. These charges stem from allegations that Bankman-Fried defrauded investors about $1.8 billion. FTX has been entangled in Chapter 11 bankruptcy proceedings in the United States since November of last year.

The high-profile and large-scale nature of FTX's collapse has triggered a wave of inquiries into the functioning of cryptocurrency exchanges and the risks associated with market manipulation. It's important to note that market manipulation is not a phenomenon exclusive to crypto exchanges; it's an illicit practice in the financial markets with a historical presence dating back centuries.

In the ever-evolving world of cryptocurrency, a question that looms large in the minds of new investors and enthusiasts alike is whether the crypto markets are manipulated. The topic has been the subject of intense debate and speculation, with proponents on both sides presenting their arguments. In this article, we aim to shed light on this intriguing issue, examining the various factors and evidence that contribute to the perception that the crypto markets are indeed manipulated.

Source: Solidus Labs

Insights from the Solidus Labs Report

Before delving into the specifics of market manipulation, it's essential to understand the context in which the crypto markets operate. Cryptocurrency, most notably Bitcoin, has gained unprecedented popularity and attention in recent years. Its decentralized nature and the potential for substantial financial gains have attracted investors from all walks of life. With the total market capitalization of cryptocurrencies reaching astronomical heights, it's no wonder that questions about manipulation have arisen.

It's important to understand the key findings of a recent report by Solidus Labs, a crypto research firm. The report, aptly titled "The 2023 Crypto Market Manipulation Report," was published by Solidus Labs in June. Although some time has passed since its publication, the facts and figures remain largely relevant.

The report is divided into two main sections: insider trading and wash trading. Insider trading involves individuals with privileged information trading to their advantage. The report highlights the significance of addressing market manipulation to foster crypto adoption, especially considering the ongoing discussions about exchange-traded funds (ETFs) in the crypto space. The Securities and Exchange Commission (SEC) has been hesitant to approve crypto ETFs due to concerns about market manipulation. While the report acknowledges that the issue may be up for debate when it comes to Bitcoin (BTC), it suggests that most altcoins are susceptible to manipulation.

The report identifies a startling statistic: 56% of ERC-20 tokens listed on crypto exchanges in 2021 showed evidence of insider trading, even on major exchanges. The authors of the report discovered a network of 51 interconnected wallets believed to be responsible for a significant portion of this insider trading activity. Unfortunately, the report does not specify which exchanges were analyzed, leaving some details unclear.

Insider trading, as defined by the report, includes any wallet that consistently buys a token shortly before it is listed on a major exchange. Surprisingly, the subsequent insider trading often occurred on decentralized exchanges (DEXs) rather than centralized exchanges (CEXs). However, only a few cases involved insiders selling their tokens on the exchanges where the tokens were listed. This might be attributed to fears of detection by insider trading detection mechanisms on these exchanges.

A case study in the report highlights one individual or entity involved in insider trading who conducted 14 listings using DEXs and 22 more using CEXs. Interestingly, the gains from this insider trading activity were not as substantial as one might expect, with an estimated profit of $300,000 against an investment of $2.7 million. This suggests that the individual or entity involved likely possessed substantial financial resources, potentially indicating an institution or a seasoned actor in the crypto space.

Another noteworthy discovery in the report was the identification of 54 additional wallets created specifically for insider trading. These wallets were found to be associated with transactions related to tokens about to be listed or newly listed tokens. The entities behind these wallets used various methods to obscure their activities, including privacy protocols like Tornado Cash, smart contract-enabled privacy coins like Secret Network, and crypto exchanges with lax Know Your Customer (KYC) requirements.

Source: Solidus Labs

The report also raises the possibility that crypto exchanges themselves might be involved in insider trading, a serious allegation that has been made against some exchanges in the past. The authors acknowledge that some of the wallets identified may have been purely coincidental, but the overall pattern suggests insider trading. They speculate that token issuers, market makers, and investment firms could be the entities behind these wallets.

Moving on to the section of the report focusing on wash trading, it reveals some eye-opening statistics. Since 2020, liquidity providers on Ethereum have engaged in wash trading involving over $2 billion worth of cryptocurrencies. This behavior was identified in 20,000 tokens, taking place in 67% of the over 30,000 liquidity pools analyzed. Wash trades accounted for an average of nearly 15% of trading activity in these pools.

Wash trading is a form of market manipulation where an entity simultaneously buys and sells the same asset, creating a deceptive impression of market activity while no actual change in ownership occurs. Notably, the authors believe that the extent of wash trading on DEXs on Ethereum is even higher, but the reported data only covers 1% of the analyzed information.

The report further suggests that wash trading is detectable and preventable in the decentralized finance (DeFi) space. It argues that DeFi protocols could implement similar regulatory measures as centralized exchanges to combat wash trading. Additionally, on-chain analysis can help identify suspicious liquidity providers.

Source: Wash trading in centralized crypto exchanges – Cepr.org

So, what does all of this mean for the crypto industry? The short answer is that these revelations are not good news for DEXs. However, it's worth noting that the report appears to focus exclusively on insider trading and wash trading on DEXs, whereas similar issues have been found on CEXs, with fake trading volumes being a significant concern.

Transparency is a critical factor in regulating market manipulation, and DEXs, with their publicly viewable and traceable transactions, have the potential to be more transparent and less prone to manipulation than centralized exchanges. DeFi protocols are also exploring ways to implement regulatory measures at the smart contract level.

While market manipulation is a challenge that the crypto industry must address, it is a problem that can be tackled with the right tools and regulations. DEXs are gradually working towards mitigating this issue, and their transparency can serve as a model for the broader crypto ecosystem. However, the crypto industry must also confront larger issues, including centralization, privacy concerns, and censorship resistance. As blockchain analytics companies like Solidus Labs lead the way in addressing market manipulation, the industry can move forward with greater transparency and accountability.

Ultimately, market manipulation is one of the more solvable issues in the crypto space, and once it is effectively addressed, attention can be directed towards other critical challenges facing the industry.

Summary

The debate over whether the cryptocurrency markets are susceptible to manipulation continues to persist, and while no definitive consensus has been reached, there are indeed compelling reasons to consider the possibility of manipulation within these markets. Several factors contribute to this perception, shedding light on why investors remain cautious when participating in the crypto space.

First and foremost, the absence of comprehensive regulatory oversight is a fundamental concern. Unlike traditional financial markets that operate under strict regulatory frameworks enforced by government authorities, cryptocurrency markets exist in an unclear regulatory landscape. This regulatory void creates an environment in which individuals or entities may exploit loopholes and engage in illicit practices without fear of legal repercussions. This lack of oversight can significantly contribute to the perception of vulnerability to manipulation.

Another prominent factor that reinforces the perception of market manipulation is the prevalence of "pump and dump" schemes. These schemes involve artificially inflating the price of a cryptocurrency through coordinated buying, often based on misleading or exaggerated information. Once the price reaches its zenith, those orchestrating the scheme sell their holdings at a profit, resulting in a swift and severe decline in price. These schemes not only deceive investors but also erode trust in the integrity of the market.

The influence of crypto whales, individuals or entities holding substantial amounts of a specific cryptocurrency, is another element contributing to the perception of manipulation. These whales possess the capacity to sway market sentiment and price movements through their significant trades. A single large sell order from a whale can trigger panic selling among smaller investors, leading to rapid price fluctuations. This unequal distribution of power can lead to a sense of vulnerability among market participants.

Furthermore, the lack of transparency on many cryptocurrency exchanges adds to the perception of potential manipulation. Some exchanges do not provide adequate information about their operations, trading volumes, or even the identity of their owners. This opacity can raise suspicions about the fairness and integrity of these platforms, further fueling concerns about market manipulation.

In light of these factors, it is prudent for investors in the cryptocurrency space to exercise caution and diligence. Conducting thorough research and due diligence before participating in any cryptocurrency investment is essential. Being aware of the risks associated with market manipulation and staying informed about the latest developments in the industry can help investors make more informed decisions and protect their interests.

While the cryptocurrency market offers exciting opportunities, it is not without its challenges. Acknowledging the existence of potential manipulation and taking proactive measures to mitigate these risks is a crucial step for investors looking to navigate this dynamic and evolving landscape successfully.

This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

David https://markethive.com/david-ogden

Central Banks Concerns About Rising Crypto Adoption. Report Paradoxically Depicts Bullish Outcome For Crypto

Crypto adoption is on the rise, and it may well be argued that the central banks don't like that fact. Recently, the BIS, monikered as the so-called ‘Bank for Central Banks,’ published a report claiming that crypto adoption causes financial instability in developing countries, where adoption is happening the most. 

Central banks of the United States, Mexico, Brazil, and other major Latin American countries conducted the report. Their concerns about crypto adoption paint a surprisingly bullish picture. This article provides an overview of this report, explains the significance of what's being said, and tells you what it could mean for the crypto market.

The report summarized here is titled “Financial Stability Risks from Crypto Assets in Emerging Market Economies.” It was published by the Bank for International Settlements (BIS) in August 2023. The report begins with a foreword that analyzes crypto adoption in developing countries. It includes recommendations on how to keep crypto under control. 

Source: Cointelegraph

BIS member central banks of Argentina, Brazil, Canada, Chile, Colombia, Mexico, Peru, and the United States wrote the report. The representatives set up a task force led by the BIS Americas Office as the secretariat. It seems to claim that crypto adoption in developing countries is high because these countries generally have low financial literacy. This starkly contrasts with a recent study by a U.S. university, which found that crypto adoption actually increases financial literacy. This makes sense, considering that you must understand crypto before adopting it. 

About The Report

The report's first section provides a summary of the key findings. The authors are hyper-focused on the rise and fall of the crypto market. They don't seem to care about why people are adopting crypto but simultaneously acknowledge the reasons why. For example, As quoted, “Proponents of crypto assets claim that they offer lower transaction costs, faster payments, no intermediation, anonymity, and potentially high returns on investment. Whether they deliver on these claims is another matter.” 

The second part is surprising, as they refuse to argue against it. Moreover, it states, “For some users, crypto assets provide an alternative to limited investments and savings instruments, while for others, they offer a seemingly safe haven against volatile domestic currencies.” 

Now, this conflicts with what the authors implied in the forward. They know those adopting crypto are informed. In other words, they know exactly why people in developing countries embrace crypto; because their fiat currencies suck. Instead of addressing these shortcomings, the authors essentially conclude that something must be done to keep crypto under control because of supposed financial stability risks. 

The authors then highlight several risks, in particular, market risks due to volatility, liquidity risks due to a lack of transparency, credit risks due to a lack of governance, AKA control, operational risks due to cyberattacks, currency substitution risks, and capital flow risks, due to crypto’s use in cross-border payments. 

The irony is that many assets are more volatile than crypto. The existing financial system is even less transparent than the crypto industry, traditional finance (TradFi) has exponentially more credit risk than decentralized finance (DeFi), and cryptos are more resilient to cyber-attacks because they're more exposed; they are literally tested every day. This underscores the fact that the only risks the authors are concerned about are currency substitution and capital flows. 

To address these risks, they claim that “Authorities can consider selective bans, containment, and regulation,” a classic starting point for these BIS reports. For those interested, here is a summary of another crazy BIS report from last year.

The report begins with an introduction where the authors explain cryptos and how they work. They then divide crypto into two categories for their analysis: stablecoins and unbacked crypto assets, which means everything else: Bitcoin, Ethereum, et al. For context, central banks hate stablecoins, probably because they’re direct competitors to Central Bank Digital Currencies (CBDCs). Interestingly, governments seem to like stablecoins because they're backed by government debt. This means they can use stablecoins to subsidize their spending. 

The authors explain that this report builds on recent work by the Financial Stability Board (FSB), a subsidiary of the BIS. Notably, the FSB’s crypto recommendations become regulations in its member countries, namely the G20. The work the BIS is building on is a crypto framework put together by the FSB, which can be seen in the image below. This infographic is ironic because it notes that stability risks only flow from crypto to TradFi. As we've seen with the banking crisis, the stability risks come from TradFi, not crypto.

Source: BIS Papers: Financial stability risks from crypto assets in emerging market economies.pdf

Before breaking down the alleged risks crypto poses to TradFi, the authors make another eye-opening claim, 

“The crypto universe was built on the promise of an efficient, decentralized, low-cost, inclusive, safe and open monetary system, but structural vulnerabilities in the design and operation of crypto asset markets make them unsuitable as the basis for a monetary system.” 

The key word here is ‘monetary’; the central banks oversee the monetary side of the financial system. In practical terms, this means raising or lowering interest rates through various mechanisms to affect the amount of currency in circulation. It's clear that they do not want to lose control of this ability. 

The Alleged Risks

Market Risk
As stated above, the first crypto risk is market risk. Firstly, the authors implied that publicly traded crypto companies are inherently risky. They also take issue with the fact that some cryptos are held mainly by a handful of wallets. They provide some fascinating statistics to back up their claims, 

“In 2020, an estimated 10,000 individuals owned about a quarter of all outstanding Bitcoin. Satoshi Nakamoto, the anonymous creator of Bitcoin, is the largest holder, with more than 1 million stored in different wallets (around 5% of the total). Other tokens show similar concentration. For example, fewer than 100 participants control over 51% of the value in Dogecoin, ZCash, and Ethereum Classic.”

So, at first glance, these statistics are concerning, but it's easy to forget that there's even more extreme wealth concentration in other asset classes. It exemplifies the top 1% reportedly earned more than the rest of the world combined over the last two years. Why isn't the BIS raising this point? 

The second thing worth noting is that most of the authors' concerns around market stability are directed at stablecoins, which should come as no surprise, given that they are competitors to CBDCs, as mentioned earlier. 

Source: Bitcoin Treasuries 

What is surprising is that the authors also target spot Bitcoin ETFs, quoting, “Bitcoin ETFs could potentially pose a market risk in emerging market economies (EMEs) by lowering the barriers to entry for less sophisticated investors and increasing investors' direct and indirect exposure to crypto assets.” 

Oddly enough, the authors are concerned about the wealth concentration Bitcoin ETFs could cause. Here are a few more statistics; “As of end-March 2023, ETFs owned a combined 819,125 BTC, 3.9% of the total bitcoins to be issued (21 million). The largest Bitcoin ETF is Grayscale Bitcoin Trust (GBTC), which owns 643,572 BTC, or nearly 3% of the total supply. In total, ETFs, governments, and public and private companies own more than 1.6 million BTC, approximately 7.8% of the total supply.”

Source: Bitcoin Treasuries 

Liquidity risk
The second crypto risk is liquidity risk. The authors note that most of crypto’s trading volume occurs on offshore exchanges such as Binance. What's odd is that they include Huobi Global as one of the top crypto exchanges and a potential point of concern when it's no longer that large.

Source: Coinmarketcap.com

Oddities aside, the authors also aim for Tether and allege that its USDT stablecoin is still insufficiently backed. They missed the memo that USDT is now backed almost entirely by US Government debt, like all the other major stablecoins. It appears that the BIS is making arguments using outdated data. 

Anyhow, there’s something else that the authors point out, which is quite essential: money market funds were a significant source of market instability in 2008 and 2020. For those unfamiliar, money market funds are kind of like TradFi stablecoins. The difference is that you earn a yield on them. 

Naturally, the authors note that stablecoins are similar and that if they were to experience a run, this could create problems for the assets that back these stablecoins, namely government debt. The thing is that most money market funds are significantly more extensive than most stablecoins and, therefore, riskier. 

Credit Risk
In any case, the third is credit risk. The authors define credit risk in the context of crypto as “The potential that a counterparty in crypto-asset markets or directly exposed to crypto assets could fail to meet its obligations in accordance with agreed terms.”

Areas of concern include interconnectedness between crypto companies, citing FTX and Alameda Research. Also, lack of governance and disclosures, quoting DAOs and leverage, citing DeFi. They also included crypto exchanges having access to bank accounts, citing Chilean authorities, who forced banks to bank crypto exchanges. 

Despite favorable crypto regulations, crypto companies and projects in pro-crypto jurisdictions still have difficulty opening bank accounts. This is likely due to the Financial Action Task Force (FATF), but this pressure could be from the central banks.

Operational Risk
Regardless, the fourth crypto risk is operational risk. The authors take issue with the fact that cryptos use blockchains, quoting, “One of the key features of blockchain technology is its irreversibility. Once a transaction is recorded on the blockchain, it cannot be undone. This feature can be problematic in situations where transactions need to be reversed, such as in the case of a hack or fraud.” 

News flash: If crypto transactions could be reversed, then there would be no point in having crypto because governments, central banks, and Wall Street could manipulate it. Just like they do with money and other assets. In case it wasn't clear enough, they want to be able to do this with crypto, too. 

Disintermediation Risk
The fifth crypto risk is bank disintermediation risk. This includes both currency substitution and reserve currency substitution, which are significant concerns for the central banks. The authors admit that crypto could “..reduce the monetary authority’s control over liquidity in the economy, thus weakening the effectiveness of monetary policy…” 

The authors reiterate why people would substitute their fiat currencies with crypto. These reasons included not trusting the fiat currency, crypto being more efficient than fiat, and crypto being more private than fiat, which isn't accurate, at least in the case of cash. 

The reserve currency substitution section is where things get seriously bullish for crypto. They quote, “…if crypto assets become mainstream, they could also replace the global reserve currency as a perceived store of value…” The report denotes this substitution process as cryptoization 2.0. Put simply, the authors speculate that crypto could compete with reserve currencies, like the US dollar, if they see enough adoption.

The caveat is that they're saying this in the context of developing countries, where they think crypto will be used to evade capital controls. Even so, this pertains to something speculated about in a previous article about the BRICS countries.  It’s possible they could adopt a cryptocurrency as their common currency. The fact that BRICS’s current and future members fit the profile of the countries described in this BIS report underscores this possibility. 

Capital Flow Risk
The final crypto risk is capital flow risk, another big concern for the central banks. That's because crypto allows people to move their money around without asking for permission from Big Brother; that's not allowed in the modern financial system. The report’s authors are frustrated about the fact, quoting, 

“Crypto assets can operate offshore and hence beyond regulatory oversight. Crypto assets can be traded and stored on a global network of computers, often offshore servers and digital wallets, making it possible for them to operate beyond the jurisdiction of any one country.”

They're also upset that, quote, “…a person can create a digital wallet on a computer or mobile device and store crypto assets in it, without having to go through any formal registration process or identity verification.” Note that they want to connect all crypto wallets to digital IDs eventually. 

To drive the point home about crypto capital flows being a risk, the authors provide another statistic, saying: “One of the biggest Mexican crypto exchanges claimed that in the first half of 2022, it processed remittances for $1 billion in crypto assets, approximately 3.6% of the total flow in that period.” This is bullish for crypto.

Crypto Risk Connection To TradFi

This begs the question of how these crypto risks could spill into the traditional financial system. The third part of the report has all the answers from the perspective of the BIS. These are summarized in a single infographic (below) that shows the connection between crypto and TradFi. These include crypto to fiat, on and off ramps, stablecoins backed by government debt, etc. 

Source: BIS Papers: Financial stability risks from crypto assets in emerging market economies.pdf

What's crazy is that the authors suggest that even if crypto risks don't spill over into TradFi directly, they could spill over indirectly. The report states, 

“Disruptions in the cryptoasset market can potentially spill over to other financial markets through confidence effects. For example, a sharp drop in the value of crypto assets could erode investor risk appetite. This could lead to outflows from the traditional financial system and tighten financial conditions.”

Put differently, if the crypto markets crash, this could spook investors in TradFi, and that would cause issues; therefore, crypto must be regulated, contained, banned, etc.; it’s madness. It also makes no sense because the opposite is true; stocks influence crypto’s price action, not vice versa. 

Crypto Adoption In Developing Countries

All of these allegations about crypto risks could be intended to prime the reader for the fourth section, which is crypto adoption in developing countries. After all, if they believe crypto is so risky and harmful, they will need to ensure those unfortunate folks in the global South are extra protected. Quips aside, the authors detail four so-called risk catalysts for developing countries regarding crypto. 

1. Crypto adoption
2. Inflation and a lack of central bank credibility
3. Lack of payment infrastructure and financial literacy (Arguably not true)
4. A lack of crypto regulation (or rather, the lack of anti-crypto regulation that central banks want to see)

Recommendations For Controlling Crypto

Following a lengthy overview of all the crypto regulations in select North and South American countries, the authors provide recommendations about controlling crypto in the fifth part of the report. They start by saying that there are three approaches to managing crypto: bans, containment, and regulation. 

They say that many authorities have argued that crypto should not be regulated because regulations would give the industry a seal of approval that could lead to more adoption. Regulations mean institutions and institutions represent lobbying for better regulations. Believe it or not, the authors aren't in favor of a crypto ban because it would mean no oversight of crypto. They also do not favor containment, i.e., keeping crypto separate from the financial system, because they know secret connections would inevitably manifest. 

So, the one option remaining is to regulate crypto, specifically with the same risk and regulation principle. If you've read this article about crypto regulations, you'll know that this principle could turn crypto into another arm of the existing financial system, which would defeat its purpose. One of the entities pushing this principle the hardest has been the World Economic Forum (WEF), which the authors cite many times in this report. 

For developing countries specifically, the authors recommend they get their monetary business in order so that there's no incentive for crypto adoption. Indeed, if the central banks and governments manage their currencies properly, crypto probably wouldn't exist because it wouldn't need to exist. They only have themselves to blame at the end of the day, and with a bit of luck, crypto will force them to be somewhat more responsible going forward. 

What Does It Mean For Crypto?

What does all of this mean for the crypto market? In short, it's very bullish. The central banks are aware that crypto adoption is growing fast and is ultimately due to deficiencies in the existing financial system, which they know they probably can't fix. These deficiencies are especially acute in developing countries, and for good reason. 

The US dollar is the world's reserve currency, and it's used in up to 96% of international trade in some regions. Unless a country has many resources, it has difficulty getting its hands on US dollars. These countries can only get US dollars by requesting an IMF or World Bank loan. These loans come with many conditions, which are typically in favor of the US and US-based corporations. 

Now, the consequence of this is that these indebted developing countries just can't get ahead. As pointed out by macro analyst Lyn Alden, only a handful of developing countries have managed to become developed over the last 50 years. For the ones that manage, it was due to their natural resources, especially oil. Some of the only exceptions are South Korea and Taiwan,  both of which have received significant support from the US over the decades, probably for geo-political purposes. 

The rest of the developing world has been stuck in the same place, sometimes worse, and they're starting to understand why. Consider that even the BIS referred to "The global reserve currency in their cryptoization 2.0 prediction.” The keyword is ‘The’一it's singular. Logically, it's a reference to the US Dollar.  Assuming it is and probably is, the BIS’s cryptoization quote reads: "If cryptocurrencies achieve mainstream adoption, they could replace the US dollar as the world's reserve currency.” 

Now consider that this is something that many central banks could be interested in; remember that the BRICS are a thing. This would explain the somewhat paradoxical conclusions of the BIS report, which is to regulate crypto even though they know that it will inevitably result in more crypto adoption. 

When you combine this conclusion with the fact that the BIS will allow central banks to hold up to 2% of their balance sheets in crypto starting in 2025, you begin to realize that some central banks might be breaking ranks. In fact, it's possible they're all breaking ranks except the Federal Reserve. That would be truly something, wouldn't it? 

David https://markethive.com/david-ogden