In a recent video posted on his YouTube channel, the CEO of IOHK and founder of Cardano Charles Hoskinson condemned the recent pump & dump in the cryptocurrency market and urged, especially newcomers to the sector, caution when trading.
After WallStreetBets decided to pump GameStop’s shares last week in revolt against the overwhelming power of Wall Street brokers, the same Reddit group also started to organize pumps for several cryptocurrencies such as Dogecoin (DOGE) and Ripple (XRP).
The market then became more volatile than usual, with Dogecoin rising by around 350% and Ripple by 100% in the course of a day. Both cryptocurrencies then, as quickly as they went up, also rapidly dropped close to their previous values.
Dogecoin was worth about $0.08 but now stands at 3 cents, while XRP had risen to about 75 cents and now stands at 37 cents.
Cardano’s rise according to Hoskinson
For these reasons, Cardano’s CEO alerted the community and urged everyone to stay calm, as ADA was also back to 2018 values yesterday, gaining 18%. Cardano, however, would not have been manipulated by WallStreetBets.
Hoskinson called the Reddit and Telegram groups outright scams, given that a lot of people are losing money in the process, as the price rises are as fast as the price falls.
The scam giveaways
Charles goes on to warn in his video that the industry also sees a lot of fake giveaways on social media – Facebook and Twitter in particular – promising big bucks, but these are nothing more than organized scams designed to steal funds from participants. Some of these giveaways even exploit Hoskinson’s own image, so Cardano’s founder advises caution, warning people not to participate because they will only lose money.