Crypto pump and dump groups

In my anniversary post I mentioned that in my early crypto days; when I still had stars in my eyes; I had tried out the classic pump ‘n dump groups that you find on Telegram.

For those of you not familiar with these groups, let me tell you more.

Background

The idea behind these groups is that they take a low liquidity crypto currency on an exchange (the fewer transactions on the coin on that exchange the better) and they orchestrate a mass buying of the coin to artificially inflate the price. The idea is then to offload the coin while at a high price and take up to 100% or sometimes more profits (advertised).

The groups normally use the Telegram platform because of the size of the groups that you can have. They then advertise the time of the next pump and the exchange it will be on. The key to this is that they do not announce what coin will be pumping. This allows the organisers to secretly buy up the coin beforehand to get in very cheap. This is even though they promise no “pre-pump” of the coins. What they then do is announce the coin for which they have most likely already set sell orders at 50% profits for example and watch their orders get filled as all the buyers rush in. The buyers are then in a rush try to set their sell orders to get rid of their bags of some useless coins and often have to sell at a loss to do so. The whole pump ‘n dump process can be over in just 5 minutes.

Admittedly I realised that there was something not above board about this Pump ‘n Dump process but I thought I could make a quick buck if I could just buy and sell faster than everyone else. This is where bots come into the picture. There are free bits of software out there that when plugged into the exchange API, can execute a buy order at the prevailing price, then at the same time create a sell order for you at a pre-determined profit margin. All you need to enter is the BTC amount to spend and the coin code. These bots really do work and are clever bits of software…kudo’s to the guys out there that develop them.

I must have only tried this method about 5 – 10 times but each time I was making either a small loss or a tiny profit, hardly worth it considering trading fees. I never spent much money on this and was still trying to prove to myself that it was a viable way of making money.

Example of a chart of a pump and dumped coin

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Thankfully, after these few failed attempts I realised just how rigged these groups were.

If you are just getting started in the cryptoverse, please, do yourself a favour and don’t get caught up in the hype around pump ‘n dump. You are only going to waste your money here.

Disclaimer

The groups that I was a member of were free membership groups. There were also paid for groups. Perhaps they got the ’signals’ earlier and were able to profit more. I can’t judge on that at all.

Thank you for taking the time to read.

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