Just like in any digital world where you have to face scams, the world of cryptocurrency is no different! Various scams are everywhere to be found but that’s no excuse to give up. A group of people that pump and dump are always frustrating to come around. They are actually investors who are quick to dive in and typically target investors that take opportunities without thinking. The virtual currency has become another playground for the scammers. Better watch out.
What is Pump and Dump?
Pump groups can scam your hard earner crypto asset. It’s like their mission to do so. Don’t let them get to you. These scammers hype up or as they call it ‘pump’ it, a less-popular token by inflating the price of it for a higher sale. Pump and ump often happen in a very straightforward manner. There are two parties in the pump and dump scam.
Pump It Up
As funny as their name sounds, the more they are dangerous to your precious bitcoin. The first pump a token which is commonly an unimportant cryptocurrency also referred to as shitcoin. Take a hint, you don’t need shitcoin in your bank. Now the scammers will buy a good amount of these token and this will make the value of the cryptocurrency exchange. They pump those across the social media while they operate in groups working via Telegrams. Danger alert!
Pumpers always use tokens that can be easily manipulated and can be made into the best target for the investors. A token like these have low supply and a small market cup. They won’t benefit you like you think they will do. Now the tokens have gained enough attention across the social media when external investors, as well as small investors, will purchase the token. However, small investors feel pressurized to get the token in the fear of missing out or as we call it ‘FOMO.’ This is noticed by the cryptocurrency market.
The Dumping Starts
Now that the pumpers have achieved what they wanted, they sells off the digital currency is a coordinated move. They sell their tokens to the new unsuspecting investors. Dumping the token causes the value of the token to fall. This will make all the investors to be left with worthless assets which they purchase on an inflating price. However, the pumpers gain a huge profit from this and leave the market like a boss.
Watch Out For These
Ryan Pumper and Fontas have been identified in the wild west of the cryptocurrency to be high profile pumpers. John McAfee is another know pumper who has promoted shitcoins for a fee on $1M. There are numerous amount of scammers in the market and these are just a few of them. Always look up more information about your token and whose group you’re investing in.
Identify the Pump and Dump
Identifying a pump and dump is easy as it is at the peak of the market, with low market cap and volume cryptocurrencies which suddenly break out with no warning signs. As tempting as it makes look, you need to have the right information to invest in the asset. Make your money but always in the right and safe way. Don’t worry you can still make a lot of money from bitcoin. We are just looking out for you.