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Author Topic: Pump and Dump Cryptocurrency: How Does it Happen?  (Read 1881 times)

rajput

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Pump and Dump Cryptocurrency: How Does it Happen?
« on: May 07, 2021, 08:47:40 AM »
Though digital coins and blockchain technology are relatively new, they are still prone to the same old types of scams that have been around for years. One of these scams is the pump and dump schemes.

Pump and dump schemes are illegal on regulated crypto exchanges. However, the unregulated crypto field has provided a rich ground for the schemes because users are sure they will not be easily caught by authorities.

For some in the blockchain niche, the main question is: “How do pump and dump schemes take place?” This post takes a closer look at the schemes to determine the process used to run them.

What Exactly is Pump and Dump?
Cryptocurrency pump and dump schemes represent a situation where an individual or group of persons plans to make a profit by pumping an asset into the market. The term “pumping” is used to indicate the purchasing of large quantities of coins to push the demand and price of respective coin up.

Then, they release the assets at a higher price to rake in a high return on investment. The scammers take advantage of the market dynamics of supply and demand to make investors see the price movements as a normal trend.

In many cases, scammers target new and unpopular coins that do not require a lot of money to manipulate. For example, scammers would rarely think of Bitcoin pump and dump to provoke a Bullish run because it would require a lot of money.

To rake in more from pump and dump schemes, scammers also target initial coin offerings (ICOs) because many investors are psychologically prepared to make a purchase. The ICO is preceded by intensive lobbying that target to showcase the pumped asset in good light.

How Dump and Pump Works
At the center of pump and dump schemes is a team of tech-abled, motivated, and organized players. These players operate from different points to make the publicity look genuine.

The team often includes investors who provide funding to buy the tokens and raise the demand. If the token selected is a low volume type asset, buying most of them allows scammers to control the supply and regulate the price.

As the inner team focuses on creating artificial supply, another team is working hard to demonstrate the good side of the tokens. In the past, scammers would use word of mouth to encourage people to buy dump and pump shares.

Today, scammers find it easy to motivate crypto buyers by using social media platforms such as Telegram, Facebook, and Twitter. Scammers even form groups and use influencer marketers to spread the ‘good’ word about the tokens.

Investors and traders rush to buy the tokens in fear of missing out at a high price. Once the scammers finally sell all their tokens, the hype and demand fizzles. The price suddenly crashes as investors realize it was a scam. But it is already too late!

The following figure demonstrates how a typical pump and dump looks.



Though digital coins and blockchain technology are relatively new, they are still prone to the same old types of scams that have been around for years. One of these scams is the pump and dump schemes.

Pump and dump schemes are illegal on regulated crypto exchanges. However, the unregulated crypto field has provided a rich ground for the schemes because users are sure they will not be easily caught by authorities.

For some in the blockchain niche, the main question is: “How do pump and dump schemes take place?” This post takes a closer look at the schemes to determine the process used to run them.

What Exactly is Pump and Dump?
Cryptocurrency pump and dump schemes represent a situation where an individual or group of persons plans to make a profit by pumping an asset into the market. The term “pumping” is used to indicate the purchasing of large quantities of coins to push the demand and price of respective coin up.

Then, they release the assets at a higher price to rake in a high return on investment. The scammers take advantage of the market dynamics of supply and demand to make investors see the price movements as a normal trend.

In many cases, scammers target new and unpopular coins that do not require a lot of money to manipulate. For example, scammers would rarely think of Bitcoin pump and dump to provoke a Bullish run because it would require a lot of money.

To rake in more from pump and dump schemes, scammers also target initial coin offerings (ICOs) because many investors are psychologically prepared to make a purchase. The ICO is preceded by intensive lobbying that target to showcase the pumped asset in good light.

How Dump and Pump Works
At the center of pump and dump schemes is a team of tech-abled, motivated, and organized players. These players operate from different points to make the publicity look genuine.

The team often includes investors who provide funding to buy the tokens and raise the demand. If the token selected is a low volume type asset, buying most of them allows scammers to control the supply and regulate the price.

As the inner team focuses on creating artificial supply, another team is working hard to demonstrate the good side of the tokens. In the past, scammers would use word of mouth to encourage people to buy dump and pump shares.

Today, scammers find it easy to motivate crypto buyers by using social media platforms such as Telegram, Facebook, and Twitter. Scammers even form groups and use influencer marketers to spread the ‘good’ word about the tokens.

Investors and traders rush to buy the tokens in fear of missing out at a high price. Once the scammers finally sell all their tokens, the hype and demand fizzles. The price suddenly crashes as investors realize it was a scam. But it is already too late!

The following figure demonstrates how a typical pump and dump looks.


info.  https://icoholder.com/blog/pump-and-dump-cryptocurrency/

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Pump and Dump Cryptocurrency: How Does it Happen?
« on: May 07, 2021, 08:47:40 AM »


Papusha20

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Re: Pump and Dump Cryptocurrency: How Does it Happen?
« Reply #1 on: May 07, 2021, 11:15:38 PM »
No one can say for sure that the cryptocurrency market will decrease or increase.  This is because it is seen that the cryptocurrency market is declining and rising again in a way that is never accurate.  Brother, I think the cryptocurrency market is more likely to grow now because the number of investors is increasing day by day due to which the demand for cryptocurrency is increasing.
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Re: Pump and Dump Cryptocurrency: How Does it Happen?
« Reply #1 on: May 07, 2021, 11:15:38 PM »
:)

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Re: Pump and Dump Cryptocurrency: How Does it Happen?
« Reply #2 on: May 07, 2021, 11:59:25 PM »
This is how the market works. The Crypto market is so volatile and nobody can control it.
For example, there is also some FUD about cryptocurrency and then many people are influenced by the FUDs. So they will drive their feeling to panic and then sell more tokens at a cheap price and these will be directly followed by the cycle of the market itself. ANd some other reasons.
« Last Edit: May 08, 2021, 12:05:26 AM by sampoerna »
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Re: Pump and Dump Cryptocurrency: How Does it Happen?
« Reply #3 on: July 05, 2021, 06:01:31 AM »
This is because the cryptocurrency market is largely unregulated so anyone can put a project with tokens and have them sold into unsuspecting investors...with just the intention to make as much money as possible. This is a very big problem affecting the whole industry resulting into many people dismayed as they lost their hard-earned money. While I am not advocating some sort of control but we have to protect the ordinary guys who can be swayed by greed to invest on these type of projects...
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Re: Pump and Dump Cryptocurrency: How Does it Happen?
« Reply #4 on: July 22, 2021, 10:16:49 AM »
So they will drive their feeling to panic and then sell more tokens at a cheap price and these will be directly followed by the cycle of the market itself.

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Re: Pump and Dump Cryptocurrency: How Does it Happen?
« Reply #5 on: November 09, 2021, 05:45:18 AM »
Crypto market is so wide and you can't even say what will happen next, it is not in control. It can change its price at any time that's why you should check it regularly and than young can get some profit.

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Re: Pump and Dump Cryptocurrency: How Does it Happen?
« Reply #6 on: June 19, 2022, 09:36:06 PM »
The pump and dump scheme, as it has been employed extensively in the equity markets for a long time. The idea behind the scam is very simple. A person or group will buy a large amount of a security or a token that is thinly traded (this aspect is very important), and by doing so, the price will rise.

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Re: Pump and Dump Cryptocurrency: How Does it Happen?
« Reply #7 on: July 02, 2022, 06:50:00 PM »
Crypto pump-and-dump schemes take advantage of people while making some big money for scammers. They can involve social media influencers who receive financial incentives for telling people to buy a certain digital coin in order to raise its value. Once the value goes up, the scammers and influencers sell their coins and pocket the profits, while everyone else sees their investments lose value

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Re: Pump and Dump Cryptocurrency: How Does it Happen?
« Reply #8 on: September 02, 2022, 07:14:55 PM »
Major Pums and Dums are caused by the High percentage holders and they manipulate the market as per their will and needs. If you can take a deep look into the crypto Pump and Dum then you would found the huge transaction record at the pump/dump days.

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Re: Pump and Dump Cryptocurrency: How Does it Happen?
« Reply #9 on: September 21, 2022, 03:35:56 PM »
Cryptocurrency pump-and-dump schemes occur when scammers take advantage of people while making large sums of money. They can include social media influencers who are paid to tell people to buy a specific digital coin in order to increase its value. Scammers and influencers sell their coins and pocket the profits as the value rises, while everyone else's investments lose value.

 

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