We will focus on crypto pump and dumps in this article.
With the growing popularity of cryptocurrencies, more and more pump and dump groups appear on apps like discord and telegram.
How Does Pump And Dump Work?
Usually thousands of traders gather in a group and pump different coins at once. Usually the owners decide which coin will be dumped next. They usually buy it before announcing it to their group to make maximum profits.
However there are more fair groups where the owner finds out about the coin the same time as the others.
Who Starts These PnD Groups?
Traders who try to profit even more from cryptocurrencies and how don’t care about the losses of others.
How Can I Spot A Pump And Dump?
It’s fairly easy. Look at this screenshot – do you see that huge spike? Normal growth doesn’t look like this.
This was a pump and dump organized by the biggest PnD discord group.
Pumps like these only take a few minutes.
Is Pump And Dump Legal?
Pump and Dump is illegal with stock trading, however cryptocurrency trading is still unregulated, which means that it’s not illegal there. That’s why so many people do it.
Is It Profitable?
Yes, pump and dumps can be very profitable. You can make a lot of money this way.
Who Loses With This?
I don’t have any official numbers on how many percent of a pump and dump group makes money and how many lose money. My guess is that 80% make money with this, while 20% lose money.
Also traders, who are not aware that a coin is being pumped and dumped and want to buy the coin at the same moment, may lose a lot of money. Maybe they see it go up like crazy and start to feel like they are missing out (FOMO).
Or there are traders that are part of the pump and dump group, but they get greedy and try to make multiple trades or they set your sell orders (profit) too high.
Is It Safe To Do Pump And Dumps?
As said it’s not illegal to do it. However there may be some changes in the future.
Pump And Dump Advantages
This differs from group to group. Usually the pumps are being organized on discord (mainly used by gamers) where there are ranks based on how many people you have invited. People who invite their friends to these groups will usually have a bigger time advantage. There are ranks within a group and the higher your rank is, the faster you find out the name of the coin.
It’s up to you if you want to take part of such pumps. It’s really interesting to see how fast the coins are being bought when these pumps happen. Usually people will tell you to stay away from these finds of groups, but I know many who made a lot of money this way.
Let me know what you think about this, in the comments.