What is Pump and Dump?
Which digital currencies had Pump and Dump?
pump and dump; You may have heard a variety of things about the terms Pump (Dump) and Dump (Dump) or up and selling to date. Two terms that are widely used in financial markets and due to the increasing popularity of these markets, their titles are heard more and more. Pump and Dump are two immoral and fraudulent strategies that any investor should be well aware of and prepared to face.
You may say that I do not intend to exploit or monetize immoral methods, but do not forget that there are always profiteers and fraudsters in the market, and you have to deal with them and protect your assets, all sorts of tricks and tricks. Get to know them.
So be sure to join us until the end of this article to tell you how to keep your property safe from Pump and Dump and the people who have set traps for your assets.
What is a Pump?
Pumping usually occurs when people with large assets start buying; Buy Cryptocurrency or another target commodity that is at the bottom of its price. These people can include powerful people, banks and companies; People known as market whales.
These groups, after investing a very large amount of their capital in the transaction, start spreading propaganda and encouraging people to invest more and more in the same stocks. For example, a powerful group buys a large volume of Kevin Alpha; It then uses cyberspace and other advertising tools to persuade people to buy Coin Alpha. These ads are usually deceptive and false and have no credible scientific source.
If you come across something like this: “If you do not shop these days, you will not have a chance to buy Coin Alpha” or “Multiply your investment by buying coin Alpha in a short time” and dozens of other tempting sentences, Be careful not to fall into the trap of six dangs.
It is with such advertisements that people are gradually deceived, start buying and even recommend it to others. As a result, as the demand increases, the price of the product or currency in question rises sharply and in a bubble. This process is called Pump.
What is a Dump?
When profiteers and fraudsters reach their desired profit, they will suddenly start selling their shares. At this time, market experts who recognized Pump, seeing the increase in supply, quickly save their profits and leave the market before a sharp fall.
Ordinary and deceived people who have entered the market, when they see the volume of sales and the reduction of prices to such an extent, for fear of the complete destruction of their capital, begin to sell at a price lower than their purchase. In this way, the whole market will suffer a very sharp fall and many people will face very heavy losses.
This process is called Dump.
How to distinguish Pump and Dump?
There may be no definitive way to diagnose Pump, especially Dump; But you can always keep a few things in mind to reduce the chances of getting hurt by these two strategies:
- If you encounter ads and a sudden increase in the popularity of a product, be sure to thoroughly review its trading volume history before purchasing. If you encounter a sudden and unreasonable growth in these records, enter the trade with more caution.
- Be sure to find a source of advertising and support and make sure they have a good track record. If anonymous people are advertising without a resume, do not enter into a separate transaction.
- Even if all the conditions seemed good, do not start trading offensively with all your capital. Do not neglect capital and risk management.
Which markets are prone to Pump and Dump?
The honest answer to this question is that all markets are prone to Pump and Dump. The two may be less likely to occur in some popular markets, such as Forex, or in some digital currencies, which are still very low-priced, for example; But in general this possibility exists in all markets.
To learn more about the Pump and Dump case, let’s take a look at some of the digital currencies that have faced the Pump and Dump situation in recent years.
Dodge Quinn has recently seen a series of Pumps and Dumps’. Some people have introduced Elon Musk as the beginning and the main factor. Some time ago, Elon Musk tweeted Dogecoin as the currency of the people.
Tell me, does Elon Musk not intend to pump this popular coin with support such as successive tweets and replacing his Twitter profile picture with Bitcoin?
Cryptocurrency market traders say that a telegram channel has recently started mysterious advertisements to buy Ripple. On the other hand, Reddit’s Twitter account has accused the Wall Street Betz group of ripping Pump.