Pump and Dump
Have you ever experienced being on a cryptocurrency exchange market and witnessing a coin going up (PUMP) like crazy? Of course, you bought some and expected to get some but by the time you bragged about it, it literally crashed? Have you ever wondering how the other guys know when to sell (DUMP)? This phenomenon is a called Pump and Dump.
Have you ever wondered how the other guys knew exactly when to sell (DUMP)?
This is a called Pump and Dump.
In fiat, Pump and Dump is a fraudulent practice of encouraging investors to buy shares in a company in order to inflate the price artificially, and then selling one’s own shares while the price is high.
How does it work?
You join a group that usually has a lot of members (a fee might be required). The members of that group will vote to pick which coin they will Pump next. Once the vote’s over they’ll decide when to start pumping and dumping.
When the “event” starts, regular investors are usually tricked thinking that might be a good time to invest since it’s going up. However not knowing this was staged, you end up loosing what you invested.
Is it legal?
There is technically no regulation about it. That’s why if you research the term on google, you’ll easily find websites that want you to join their groups.
Should you try it?
It’s up to you. Be aware there is a lot of scammers among these groups. Some people are claiming groups creators already buy before announcing anything to their followers.
How to spot a pump?
It’s hard but something that goes up too fast could be on of these events. Also, a dead coin that comes to life all of a sudden is a red flag.
Get informed before you buy anything new!