The Pump and Dump scheme explained
You become interested in cryptocurrency after seeing that a certain currency is unexpectedly gaining popularity. Then there’s a strong urge to put money into it. After all, everything with this coin is going swimmingly, right? However, if you spend money now, there’s a good risk you’ll lose it.
What is a pump and dump scheme?
A pump and dump is a scheme in which a group of people tries to profit by manipulating the value of a coin. Through spreading false information and hyping a coin on social media, the coin’s popularity grows and its price rises.
The people of the pump and dump scheme will then sell their coins for a profit. They did get in while the race was still going on, after all. The Sjaak are those who arrived later. The price of the crypto coin has fallen after the pump and dump participants dumped (sold) it, and the rest are left with a loss.
These forms of pump and dumps are declared in groups on Telegram and Discord. The organizers simply notify you in advance of the next Pump and Dump’s date and time. The coin is only given a name when the time comes.
When the pump and dump begins, the organizers are the only ones who have already invested in the coin. In other words, they benefit handsomely from it.
The managers often choose cryptocurrencies with a low market cap and little trading volume. This makes manipulating the value simpler.
Managers always select cryptocurrencies with a low valuation and little trading volume. This makes manipulating the value simpler.
How to prevent falling into the scheme?
Always remember the investment adage: “If it’s too good to be true, it probably is.” If you get a stock tip from someone you don’t know, think about why they would be so happy to share such details with you.
Don’t expect a big and fast return on your investment because it’s unlikely to happen. It’s also important to do your own research before making any investment. This should help you avoid being a victim of pump and dump schemes.
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Nothing on Cryptinus constitutes professional and/or financial advice. Always think for yourself and make sound decisions when investing. Never invest money that you can’t afford to lose.