Institutional Manipulation Alleged to Drive Market Volatility
Charles Hoskinson, the founder of Cardano, has publicly accused major financial institutions of orchestrating the recent downturn in the cryptocurrency market. Speaking during a livestream on November 24, Hoskinson asserted that coordinated pump-and-dump schemes were the primary cause of sharp price declines observed across the crypto market in late October and November. He detailed how institutional trading activities artificially inflated asset prices, leading to rapid sell-offs and a sustained period of market weakness.
Hoskinson identified prominent firms, including Citadel, as central players in these alleged market manipulations. According to his account, these institutions initially drove prices upward through aggressive buying. Subsequently, they reversed their positions, engaging in heavy selling as prices reached their zenith. This strategic cycle of accumulation and liquidation, Hoskinson explained, allowed these institutions to profit from both rising and falling market conditions, ultimately draining tens of billions of dollars from the market.
Bitcoin's price trajectory served as a key example of this phenomenon. The cryptocurrency had previously surged to approximately $126,000 more than a month prior to Hoskinson's statements. However, it experienced a significant decline, dropping to around $81,000 in the week preceding his remarks, illustrating the severe stress within the market. Hoskinson emphasized that the slump was not merely a result of speculative trading but a deliberate strategy employed by large institutions that exerted control over price momentum during the most volatile trading sessions.
Retail Investors Bear the Brunt of Institutional Cycles
Hoskinson highlighted that retail investors were the most significantly impacted by the market downturn. He explained that a majority of retail participants entered the market during periods of inflated prices. Consequently, they faced substantial losses when large institutional players abruptly shifted their strategies. Market makers also encountered difficulties due to the pressure generated by sudden withdrawals of liquidity, exacerbating the damage, particularly for leveraged positions. These combined factors contributed to unstable trading conditions that persisted for extended durations.
He drew parallels between the current market environment and the 2021 bull run, which he characterized as being driven by irrational excitement and speculative excess. Hoskinson cited high-value NFT sales and unrealistic asset valuations from that period as clear indicators of this speculative behavior. Furthermore, he referenced the collapses of major platforms like FTX and LUNA as outcomes of similar cyclical patterns of behavior, events that erased billions in value and severely eroded investor confidence across the broader crypto market.
Despite these events, Hoskinson maintained that the pattern of institutional profit extraction at the expense of retail losses has become a recurring theme, continuing to shape recent market performance.
The Role of Regulation in Market Recovery
The described institutional strategy typically involves accumulating significant cryptocurrency holdings, then artificially inflating prices through concentrated buying. Once peak levels are reached, these entities often switch to short positions and initiate large-scale sell-offs, triggering market crashes and allowing for profit extraction at multiple stages of the price cycle.
These actions contribute to a slowdown in overall market recovery, as investors become hesitant to re-enter the market after experiencing repeated losses, thereby reducing liquidity and prolonging bearish sentiment. In light of these concerns, Hoskinson pointed to upcoming regulatory efforts as potential catalysts for stabilization.
He specifically mentioned the proposed U.S. CLARITY Act as a potential corrective measure. This legislation aims to introduce stronger oversight and greater transparency in the crypto market, establishing clearer trading rules and enhancing investor protections. The bill also seeks to reform market structures to mitigate risks of manipulation. Hoskinson expressed optimism that such measures could gradually rebuild confidence and that improved legal clarity would strengthen market operations, potentially leading to more cautious and structured participation.
This shift towards regulated conditions could also support longer-term adoption trends. Hoskinson projected that Bitcoin could potentially reach $250,000 by late 2026, contingent on improved compliance and oversight within the market. He concluded by reiterating that the recent market slump was largely attributable to coordinated institutional trading tactics and aggressive leverage cycles, factors that explain the collapse, the slow recovery, and the expectations for future market restructuring.