Originally published in Svenska Dagbladet by Björn Jeffery, October 14, 2025
Thousands of billions of dollars went up in smoke when the crypto market shook at the weekend. The affected are complaining of market manipulation — but where is the line when it has become a method rather than a crime?
When crypto figure Huang looked at his account over the weekend, nine million dollars had disappeared. It was not a hacker who had been at work, however. It was a trading loss triggered by Bitcoin falling 13 percent. The move came after it appeared that the United States and China were about to escalate their trade war.
13 percent may not sound like much, but the domino effect was considerably larger. Several smaller cryptocurrencies lost around half their value in one fell swoop, and some lost far more. On top of that, many of them were being traded with leverage — where the effect of price movements is multiplied — and suddenly things moved downward very fast.
In total, around 3,600 billion kronor disappeared over a single weekend. That is equivalent to approximately the combined market capitalisation of Investor, Atlas Copco, EQT, SEB, Sandvik, and H&M.
The figures are comparable to stock market losses — but that is where the similarities end. When the cryptocurrency Dogecoin — which started as a joke — falls, one has to wonder how it was priced in the first place.
The underlying value of many cryptocurrencies is nothing more than demand from other buyers. There are no underlying assets, no cash flow or future dividends. It is worth what someone else is willing to pay — neither more nor less. Sometimes it goes up, sometimes it goes down. In many respects it resembles a form of gambling more than a stock exchange.
But like an unregulated casino, it is hard to know how fair the playing field really is.
After the weekend’s crash, speculation ran rife that a single short-seller, with a massive bet, had created all the turbulence. The short position — against Bitcoin — was taken just before Donald Trump’s announcement targeting China. Did they know something that had not yet reached the market?
On the stock market, an event like this would be investigated by the country’s financial supervisory authority. Insider trading is something that can result in criminal prosecution. In the crypto market, however, the rules are different.
The way cryptocurrencies are traded does resemble ordinary stock trading — both visually and in how it has been packaged. There is talk of market capitalisations and you can buy “futures” if you want to speculate on whether a given asset will go up or down. In September, Brian Armstrong, CEO of crypto platform Coinbase, wrote that they had made it possible to trade with 50 times leverage. The smallest change then creates extreme swings. But the product was in demand from customers, according to Armstrong.
The analogies are treacherous — not least because trading now often takes place on exactly the same platforms. Services like Robinhood and eToro offer both stock and crypto trading on the same platform. Even on Swedish Avanza and Nordnet it is possible to trade certificates that give three times leverage on a rise in the Bitcoin price. It is not hard to understand that traders can get confused. If it walks like a duck and looks like a duck — is it not a duck?
Unfortunately, it is not. Individuals are free to trade cryptocurrencies at 50 times leverage. It resembles a product that the financial elite buys and sells. But the underlying regulatory framework that is supposed to ensure everything proceeds correctly does not exist.
On the crypto market, market manipulation is more of a method than a crime. One of the biggest sites for creating cryptocurrencies has a name that suggests precisely this: Pump.fun. A so-called “pump and dump” — trying to drive up the value of an asset and then selling everything at a high price — is so common that it is now joked about in the industry.
Was it someone with insider information who set the whole market swaying? We do not know today. And even if we did know, what could we do about it? The market exists in a legal grey zone where nobody really knows what the rules are, and it lacks institutions capable of ensuring fair play.
In the middle of the market are crypto traders who have grown accustomed to prices only going up, and who add yet more leverage to speed up the value development. One small tremor and many suddenly lost everything. The short-seller, on the other hand, closed their position immediately and made around 835 million kronor in profit in a single day.
Did these crypto traders not know they were more like casino gamblers than proper investors? Perhaps. But it is only when you lose that you start thinking about what rules actually apply.
