Pump and Dump is a market manipulation strategy in which traders first buy up small portions of coins. After that, the “pumping” of the value of the coin begins — a hype is created with publications in social networks and messengers about the upcoming growth of a certain currency, fake news about partnerships is published, etc. On this wave, the exchange rate begins to rise and traders sell assets at an inflated price, followed by a market collapse.
There are two types of Pump and Dump:
- Short-term. “Pumping” lasts for several hours or even minutes. The object is little-known cryptocurrencies.
- Long-term. Manipulations are carried out for several days, ups and downs — stepwise. The object is coins from the top of the rating, and only large traders can afford the game.