The fake news release saying that Kroger would accept bitcoin cash as one of the payment methods for selling its products made the cryptocurrency jump from five percent to $632. The news appeared on a site known as PR Newswire. Many companies choose PR Newswire to publish their official statements. The Kroger KR automatically picked up the investor relations page of -2.53%. However, the said statement is no longer available on both sites.
Bitcoin fell back recently; trading at $600 after Kroger denied its connection with the report and declared it fraudulent. Bitcoin cash emerged in 2017. According to the market capitulation, the Bitcoin fork is the largest cryptocurrency in the 21st century. The propaganda spike came into view only some weeks after another cryptocurrency, LTC, increased 20 percent in value in September because of the fake news published through the platform of GlobeNewswire. According to that report, Walmart had accepted LTC as one of the payment methods at its various retail spots.
Interestingly, both the incidents had many similarities as they claimed that primary retailers had started selling their goods for certain digital currencies. Some experts said that these incidences have nothing exclusive to do with digital currency. Robert C. Hockett, a finance professor at the Cornell Law School, said he had seen this scenario throughout finance history. He told the interviewer of MarketWatch during a telephonic interview.
According to the professor, most scammers buy some of this material before spreading the rumor. Once the talk is out in the market, scammers observe the price increases in value as individuals desperately react to such tittle-tattles thoughtlessly without due diligence. Hockett further enlightened that the scammers sell what holdings they have kept with them after the cryptocurrency marketplace attains a higher level and gains a great fortune.
ProChain Capital’s president and co-founder said this trick had become old though it was not hard to channelize, especially when it comes to cryptocurrencies. According to Chen Arad, the Chief Operating Officer at Solidus Labs, the crypto risk monitoring firm, it is all about the fact that everything stems from the fact that such tricks are among a young asset class but they carry lots of excitement with it.
At times, Fear of Missing Out or FOMO and buzzing facts encourage people to share and re-tweet quickly out of excitement. It is often conducive o manipulation and fraudulent activities. Tawil highlighted that the scammers choose credible digital currencies in such episodes that can help move a lot percentage-wise. He said that bitcoin would more likely observe up to a three percent jump if Kroger confirmed it was accepting bitcoin as its payment method.
The scammers needed a significant jump of up to thirty percent in five minutes before the retailer’s denial came out as to bitcoin cash at that instant. Of course, they try to make big money significantly quickly. Other industry participants revealed that cases involving rumors about reputable retailers accepting specific cryptocurrencies exclusive consumer protections and regulatory simplicity.
Tawil further said that whatever happened related to Bitcoin Hash seems to be an isolated incident. It referred to the fake Kroger statement. Experts have seen such situations before since it has now become a pattern. Cornell’s Hockett seconds other crypto experts, saying that the recent Bitcoin Hash increase and drop is another instance of how it has become significantly urgent for the regulatory authority to clarify cryptocurrency applicability to the markets.
Hockett said it is a matter of not such a lengthy period. And soon, the necessary regulations will be there through definitive jurisdiction about the crypt market to prevent these instances. Experts also highlight the importance of being more cautious in reacting to trading news and doing due diligence before acting upon a plan. The CEO, Panxora, a crypto exchange, emailed to MarketWatch, writing that well-researched decisions are always better than being among those who do not see anything else to hit the purchase button.