Applies mostly for the US.
When you buy and sell stocks you declare realized gains and losses. Now, if you sell a stock and immediately re-buy it, you trigger a wash sale. Day traders do stuff like this, but as we’ve all heard many times, most traders lose money.
Institutions can’t (probably do, but aren’t supposed to) collude or blatantly manipulate the market. However, as I understand it, nothing prevents retail or institutional whales from flipping constantly, all day, every day, and automate the whole goddamned thing. They can be making millions in their sleep by manipulating the entire crypto market and there is currently absolutely nothing preventing them from doing it.
In order for me to become a millionaire, I need to put a significant amount of money in a brand new project and hope it becomes the one in a thousand that doesn’t zero out. The probability of a project going 1000x in the short term AND I bought in early AND I had the confidence to drop $1,000 into it on day 1 AND it doesn’t have liquidity issues so when I do try and sell I actually get my million….. small. The probability is very small.
Now, MATIC shifts 10% in a day is no big deal if you own a few hundred bucks worth. But what if you had $10,000,000 in it? Million bucks in a day. No need to Hodl. Just buy, wait a couple of days, take a nice 5-15%, drop everything, market sinks, buy it again.
You get 1 institution playing that game and they’re netting a BILLION a year by tossing around 30M and using a rudimentary algorithm. You get 5, 10, 15 institutions all doing that at the same time? Retail investors are Fucked Forever.
That’s why I’ve decided that we need real regulation. Sure, the regular stock market is also stacked against us and shady shit happens every hour. But at least there is the appearance of rule and law. Here, we have absolutely no protection at all.
Positions: own like 13 projects and every single one of them is in the red.
Edit: I didn’t change my mind because I got “rekt”. I’m holding long, 3-10 yrs. I changed my mind because I watch every project move up and down in total unison every hour of every day but it doesn’t exactly follow the equities markets.