Cardano Founder Blames Institutional Schemes for Crypto Crash

• Hoskinson claims institutions engineered pump-and-dump cycles that triggered the slump.
• Retail traders absorbed heavy losses as institutional reversals drained liquidity fast.
• Proposed CLARITY Act could curb manipulation through stronger oversight and clearer rules.

Charles Hoskinson, Cardano’s founder, accused major institutions of triggering the recent crypto market slump during a November 24 livestream. He said coordinated pump-and-dump schemes caused sharp declines across the crypto market in late October and November. He explained that institutional trading activity inflated prices, forced a fast selloff, and dragged the market into sustained weakness.

Hoskinson Links Institutions to Market Manipulation

Hoskinson identified firms like Citadel as key actors behind the market downturn. According to his statements, these firms first boosted prices through aggressive buying behavior. However, they later shifted positions and sold heavily as prices peaked.

He described the process as a calculated cycle of accumulation and liquidation. Notably, he said institutions profited from both rising and falling price movements. He added that these actions removed tens of billions from the market.

Bitcoin provided a clear price example during the period discussed. The asset reached $126,000 more than one month earlier before sliding sharply. It then dropped to around $81K last week, showing severe market stress.

However, Hoskinson stated that speculative trading alone did not drive the slump. Instead, he emphasized deliberate strategy and timing by large institutions. He explained that these entities controlled price momentum during the most volatile sessions.

Retail Losses Follow Aggressive Institutional Cycles

Hoskinson noted that retail investors suffered the most during the downturn. He explained that most participants entered positions during inflated price periods. However, they faced sharp losses once large firms reversed their strategy.

He added that market makers also struggled under the pressure created by abrupt liquidity withdrawals. Leveraged positions intensified the damage. These factors left trading conditions unstable for extended periods.

He compared the current environment to the 2021 bull run. Notably, he described that period as fueled by irrational excitement and speculative excess. He cited high-value NFT sales and unrealistic asset valuations as clear examples.

He further referenced the collapse of FTX and LUNA as consequences of similar behavior cycles. These events erased billions and weakened investor trust. Confidence across the broader crypto market declined sharply.

However, Hoskinson insisted that the pattern has now become familiar. He said institutions repeatedly extract profit while retail absorbs losses. This cycle, he argued, continues to define recent market performance.

Related: South Africa Warns Stablecoins Threaten Key FX Controls

Regulation and Recovery Expectations 

Mostly, institutions first accumulate significant crypto holdings. They then drive prices higher through concentrated buying activity. After reaching peak levels, they switch to short positions. Subsequently, they initiate large-scale sell-offs that lead to steep market crashes. This approach allows profit extraction at multiple stages.

These actions slow overall market recovery. Investors hesitate to reenter after repeated losses. This hesitation reduces liquidity and prolongs bearish sentiment. Despite these concerns, Hoskinson pointed to upcoming regulatory efforts for stabilization. 

He highlighted the proposed U.S. CLARITY Act as a potential corrective measure. The bill could introduce stronger oversight and transparency. He said the legislation aims to define clearer trading rules and improve investor protections. 

It also targets market structure reforms to reduce manipulation risks. These measures could rebuild confidence gradually. Notably, he projected improved stability once legal clarity strengthens market operations. He suggested that structured regulation could increase cautious participation. 

This shift may also support longer-term adoption trends. He further stated that Bitcoin could potentially reach $250,000 by late 2026 under regulated conditions. However, he framed this in terms of improved compliance and oversight.

Meanwhile, Hoskinson linked the market slump to coordinated institutional trading tactics and aggressive leverage cycles. These factors explain the recent collapse, the slow recovery, and expectations for future restructuring.