Someone just asked: Why do so many people shill small-cap coins? Aren’t they worried that if too many people pile in, the price won’t be able to go any higher?
The requirements for a coin to become a wild pump have never been about people shilling it. They’re:
Token supply: First, the supply needs to be tightly controlled. A coin with a fully circulating supply that can’t be controlled is unlikely to become a wild pump—otherwise, it would take an unlimited amount of money.
Accumulation phase: New coins don’t need one, though occasionally a new coin can become a wild pump. Older coins do need one: they need to stay at high levels for a long time without attracting buyers.
Market-making capital: It takes money to accumulate tokens, build open interest, and control the price.
Liquidity: Some coins meet all the conditions above, but nobody trades them. Without liquidity, it’s hard for the people behind them to make money.
There are also several types of shilling.
One is unsolicited, free shilling.
In reality, the coin has usually already made it onto the top gainers list or attracted lots of discussion. Most people shill it to ride the hype. Some hold the coin; others don’t hold any at all. From the market maker’s perspective, whether people are calling for a long or a short, as long as their calls bring in trading volume, that’s liquidity. A quick move up or down, and it all goes into the market maker’s pocket.
The other type is paid shilling.
This is rare nowadays because the market maker doesn’t need it. As long as they push the price up, people will jump in. If the price isn’t really being pushed up, but a whole bunch of people are all shilling it at once, they’re most likely looking for exit liquidity.
The requirements for a coin to become a wild pump have never been about people shilling it. They’re:
Token supply: First, the supply needs to be tightly controlled. A coin with a fully circulating supply that can’t be controlled is unlikely to become a wild pump—otherwise, it would take an unlimited amount of money.
Accumulation phase: New coins don’t need one, though occasionally a new coin can become a wild pump. Older coins do need one: they need to stay at high levels for a long time without attracting buyers.
Market-making capital: It takes money to accumulate tokens, build open interest, and control the price.
Liquidity: Some coins meet all the conditions above, but nobody trades them. Without liquidity, it’s hard for the people behind them to make money.
There are also several types of shilling.
One is unsolicited, free shilling.
In reality, the coin has usually already made it onto the top gainers list or attracted lots of discussion. Most people shill it to ride the hype. Some hold the coin; others don’t hold any at all. From the market maker’s perspective, whether people are calling for a long or a short, as long as their calls bring in trading volume, that’s liquidity. A quick move up or down, and it all goes into the market maker’s pocket.
The other type is paid shilling.
This is rare nowadays because the market maker doesn’t need it. As long as they push the price up, people will jump in. If the price isn’t really being pushed up, but a whole bunch of people are all shilling it at once, they’re most likely looking for exit liquidity.