Shilling in cryptocurrencies: how investors can avoid falling for manipulators' tricks

The cryptocurrency market is literally teeming with various risks, and one of the most dangerous is the phenomenon known as shilling. Every day, new investors lose money due to skillfully organized campaigns promoting dubious projects. But what exactly lies behind this term, and how can you protect your portfolio? Let’s figure it out together.

Why ordinary investors become victims of market manipulation

Shilling in the cryptocurrency space is not just marketing. It is a targeted campaign to create artificial hype around a project. Organizers exploit psychological vulnerabilities — the fear of missing out (FOMO) — to make people act impulsively.

The essence is simple: at first glance, an ordinary coin begins to attract attention from various “authoritative” sources. Everyone says it’s the next big hit. Everyone advises to buy right now. No one explains why. And it’s precisely in this fog that the danger lies.

Novice crypto investors, who lack sufficient knowledge to analyze a project, become the first victims. They see the price rising, discussions increasing in communities, and decide to join the wave. By this time, the main beneficiaries are already preparing to exit.

Five obvious signs that reveal fake coins and projects

Before investing, you need to learn how to recognize dangerous signals. Here are five main indicators that you are dealing with shilling:

Massive presence of influencers and KOLs. When dozens of bloggers, who previously hadn’t heard of the project, suddenly start praising it simultaneously, it’s a red flag. They are usually paid for such advertising, but they keep silent about it. Check: if a KOL cannot explain why exactly this project, it’s likely they just received a reward.

Lack of concrete information about the project. No detailed technical document, vague roadmap, unclear goal. Instead — general words about “revolution” and “future.” Serious projects thoroughly document their architecture and vision.

A wave of positive reviews and discussions across all channels simultaneously. One coin is mentioned in 10 different chats, on 5 forums, and in several social media groups within a few hours. This is not organic interest growth; it’s a coordinated campaign.

Absence of a real history and reputation. The coin appeared literally yesterday but already gives the impression of a significant project. In reality, it has no past, no achievements, no team with obvious experience.

Extraordinary promises without grounds. The project promises a 1000% return, revolutionary technology, or partnerships with major companies, but provides no evidence. Real innovations in crypto are confirmed by results, not words.

How the mechanism works: two phases of market manipulation

The scheme operates according to a proven scenario consisting of two clear stages.

First phase: launching the campaign. At this stage, the project begins active promotion. They hire KOLs, buy advertising, create fake accounts on forums for positive reviews. YouTube videos, Reddit posts, Twitter tweets — everywhere the same message about a potential price surge. FOMO psychology works perfectly: people see everyone buying, fear missing out, and start buying too. The price rises, serving as “proof” of the right choice.

Second phase: exiting the position. When the price reaches a certain high, insiders start selling. Initially in small portions, then in larger volumes. New investors who entered at the peak see the decline and panic sell at a loss. As a result, the price crashes, and those who entered early have already exited with good profit. Others suffer losses.

What consequences does shilling bring to the entire cryptocurrency market

The impact of this phenomenon extends far beyond individual investors.

Firstly, it spreads false information. When the market is flooded with FOMO stories and exaggerated promises, it becomes harder to find the truth. Investors lose trust in where to find reliable data.

Secondly, the risk of fraud increases overall. When people face losses due to shilling, they start to distrust all crypto projects. This reduces interest in legitimate innovations that could truly change the financial system.

Thirdly, volatility arises without any economic basis. Prices jump not because the real value of the project has changed, but because someone launched a large-scale advertising campaign. This creates an artificial and unstable market.

Finally, the entire crypto sector suffers reputational damage. Regulators see such schemes and increasingly restrict access to cryptocurrencies for ordinary people, considering them risky assets.

Practical guide: how to protect your investments from manipulation

Protection begins with awareness and knowledge. Here are specific steps every investor should take:

Conduct independent research first. Never rely solely on what others say. Read the project’s white paper, study technical documentation, familiarize yourself with the team members — their past experience and achievements. If the team hides behind avatars, it’s suspicious. Check the social media of the founders, their industry history.

Critically evaluate sources of information. If advertising is placed by a KOL, demand disclosure of their financial interest. Read opinions from different sources. Compare positive reviews with critical ones. On reputable platforms, there is usually a balanced view.

Avoid coins with unclear origins. If the project is new, trading volume is minimal, and there’s nothing about it in search engines — this is not a place for your money. Focus on projects with an established history and liquidity.

Diversify risks through allocation. Don’t invest all your funds in one coin. Even if you are confident in the project, split your capital among several assets. This is a safeguard against big losses.

Invest only free funds. Use money you can afford to lose, and do not take loans for crypto. The market is volatile and unpredictable, so your financial safety cushion should remain untouched.

Final thoughts

Shilling in the crypto world is not a fleeting problem. It is a systemic phenomenon that evolves along with the market. Manipulators are becoming more inventive, but the main mechanism remains unchanged: exploiting human emotions and fear.

The key to survival in this market is education and healthy skepticism. Don’t follow the crowd blindly, don’t believe promises without proof, always ask questions. By staying vigilant and applying the principles described above, you will significantly reduce the risk of falling for shill coins and be able to make truly informed decisions in the crypto market.