The One About Pump 'n Dump

in cryptocurrency •  5 months ago

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When there is money to be earned there will always be people who are trying to take advantage of others. With cryptocurrencies because of the lack of regulations there is a higher risk of scamming and scheming.

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One of those dubious schemes is called the Pump ‘n Dump group. The group is made up of a leader or captain and a group of followers (mostly on Whatsapp or Telegram). The leader of the group informs the followers about the details of the pump and dump.

Details include: The targeted Exchange, the time of the pump ‘n dump, the cryptocurrency needed to buy the coin and the strategy, all but the cryptocurrency that is going to be pumped.

The strategy basically is to all start buying at the same time (the more followers the better). This will cause the price to skyrocket. After that the group will hold the coin, depending on the instructions of the leader for 10 - 30 minutes.

During the operation the leader will send the instructions and updates to his followers

The next step is hyping the coin on Social Media (Twitter for example) to lure in interested parties. When FOMO induced buyers also start trading, the coin will keep the upward momentum going, achieving 400% - 600 % gains.

After the pump the leader will signal for the selling part of the operation, he will instruct his followers to start selling the coins (above market price to keep the pump going).

Another part of the strategy is not to sell in bulk but in parts so that you avoid a complete dump of the coin

After all is well and done, the group should have made some real money, really fast.


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These kind of ads are used to gather a large group of participants. I am not adding a link to this picture because I don't want to promote these groups or activities.

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But…..In reality things are not as advertised.
You see the only way to really profit from these kind of groups is if you know beforehand which coin is going to be pumped.
This way you can buy your coins before anyone else and avoid the massive increase in price that will occur when the pump ‘n dump group start buying coins.
With a group of 1500 member the price of the targeted coin can double in a couple of milliseconds, so it is near impossible to buy the coin at a reasonable price.

And that’s when things go even more sideways.Can you imaging managing 1500 nervous cryptotraders with nothing more than a messaging app? It would be hard to do even if you knew everyone in the group but with total strangers and money on the line, things go south really, really fast.
After people realize that they bought in too late, they start to go off script in an effort to reduce the loss and start dumping fast. This causes others to follow suit and a couple of minutes after the pump started the price starts to drop fast (and I mean real fast).


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So you probably wonder why to bother at all? Well, there is a small group that always comes out ahead and those are the leader and his inner circle. Because they already bought coins before the coin was announced to the rest of the group.
So when the followers start buying, they actually are already buying the coin at a higher price.
Things get even more devious, because now the leader and his inner circle have the option to sell their cheaply bought coins to the followers who are participating in the pump ‘n dump with insane profits.

In theory a pump 'n dump could actually workout for everyone, I am sure of that (besides the morality of it all). But what you need is a dedicated, disciplined group who follow the instructions to the letter otherwise the followers will never get something out of the pump ‘n dump.


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Great article. I really hate Pump&Dumps and think people that do them are parasites and they are harming the cryptocurrency world.

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Hey @sydesjokes, thank you for stopping by, I really love Kryptonia man.
It's true that these pump 'n dumpers are hurting the cyptocurrency scene just to earn a quick buck. The way I see it they are just dumping their coins on their unsuspecting followers. If it sounds too good to be true...well it usually is.

Hi. am a lover of your post and just say this is epuc. I must say that I like your post and it am inspired.good job , thumbs up, keep up the good work

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Thanks man, It is comments like this that keep me going. Steem on!

Pump and Dump clubs can be very dangerous, you can get your Exchange account banned and could lose your money. Great write up, just beware if you are unsure of the dangers.

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I know that exchanges threaten people with bans but I am unsure how they would enforce it. How do you differentiate between pumpers and regular buyers?

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If all of a sudden 500 people buy the same coin, then all of a sudden sell it at the same time, then you know who they are, mark their account, when it happens again you have your crooks.

Probably one of the best posts i have read. The design of you blog is giving me some nice ideas to improve mine. But now to the content:) :
Well this groups are like poison to our crypto community, but the only think to do prevent their power is to inform the people, like you did. Thanks :)
I would love to see you check out my blogs. There is more coming in the next days.
Greetings from Germany

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After such a great comment on my post and the resteem, how can I not check out your posts?:)
I will follow you and read your posts. I checked out your latest post, it is really good. You should write more often. Steem on!

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Hi :) Before this post to be honest didn't knew that how actually this pump and dump system happens. I was always confuse , but now with this post I learnt a lot . :) Good Job Dear

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I only learned about these groups myself. At first it sounded like a nice way to earn some quick bucks. But after some research I soon learned that it is just another way of duping unsuspecting traders.

hola soy nueva en la comunidad me gustaria tu ayuda @sahari

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I have no idea what you said, my Spanish is very poor. I will just interpret this as follows:
"You sir are a brilliant writer and this is the best blog I have ever read" ;)

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He said he would appreciate your help. He is new to the community. In other words, your translation is very accurate :) And I am trying to say the same :D

Thank you for using the family tag! This post was chosen to be featured in the latest issue of 'Notes'. Do stop in and see what some of your other allies are up to & keep Steeming on! #thealliance pagebreak.png

Last night I saw this coin Janus going to + 6700% (with value above 22.00 dollar). This morning dumped and value at 2,47

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That is the kind of coin these groups target. Buy and get out, only thing is no one except the insiders of the group can take advantage of the surge.

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Yep. And the only way to grab a (small) bite as well, is stay awake and be alert 24/7.

If you see a very huge spike upward in the chart, probably it is a pump. So stay way of buying moved by FOMO.

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Good advise, it is better to benefit from a coin that grows in value because of the increase in demand instead of that it is "engineered". I like to use a long term strategy because it pays more in the long run. Instead of get rich quick schemes

Nice info in the post.
I have also new post for new comers to read and learn Technical Analysis.
I hope this also helps to understand crypto market
https://steemit.com/crypto/@asifgoraya123/japanese-candle-sticks-learn-technical-analysis-and-other-info

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My man, thank you. I will look up your post. I am in desperate need of learning how to read candle sticks (seriously). I have read tutorials and watched videos but still I just can't get the hang of it.

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You will learn a lot from my posts.
I hope that will help you. do not forget to upvote and follow if you like my posts.

I like your idea about pump n dump! Interesting promotion you got here. I will check and follow you sir.

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Thank you, I will try and write some interesting and engaging content.

Great post

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Well, thank you kind Sir. I aim to please ;)

Pump and dump has to be one of the worst parts about crypto. It's really easy to get caught up in the hype, buy, and then watch the value of your investment fizzle out.

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Sadly Pump and Dump seems to be becoming more popular at the moment. People don't realize that in fact they are hurting crypto. It gives conventional fin another reason to be weary of crypto.

As a noob in investing in cryptos I always seem to buy at high prices because news of the coin only spread to me my the time the coin has risen 200 to 300% I will be holding long term in belief the coins have more value in the future. Hopefully I am right. Thanks.

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HODL is the way to go, it might take a while longer but if you believe in the coin...
Also Blockfolio is a great app with alarms, you can set an alarm if a coin rises or drops to a certain level.

It sounds extremely risky and not beneficial at all to cryptocurrency long-term. These are the types of groups that force government intervention, unfortunately. I'll be interested to see how all of this develops. It is obvious that many of these groups exist because many really bad coins have jumped significantly only to later fall off of the map.

Thanks for the post and the information.

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It is both risky and does a lot of harm, although the leader of the groups say that they are actually "helping" the coins when in reality they are only helping themselves. There is little what can be done about it except warn people not to join these group and point out the risks.
And you are absolutely right, it is these kinds of things that the government will use to crack down on crypto.

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Thanks for the reply and great comment. I used to trade penny stocks (about 10 years ago) and the same was true. Since I wasn't a part of these groups, I was often on the wrong side of these moves. Investing in Steem and Steemit with time and effort and hoping to help build the platform and my portfolio at the same time.

Take care

Hi there :) Nice article. I'm new to the crypto world and have often thought about the possibility of this situation, and have been cautious about running into it.

Your article is the first time I've seen the concept in writing, and with a term assigned to it. Thanks for satisfying my natural curiosity. Well written.

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Thank you, my advise is not to do it, you are not able to beat the odds. The house always wins in this case.

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yes i know i am trying to stay away from them. thanks!

Wow, I knew there was something called pump & dump, but I had never really looked into it. Your post is really easy to understand and now I think I can go and explain the topic to someone else . Thank you for writing so well, @xervantes. I think your content is very valuable. I hope it gets many more views and not just these lowsy 89.

If it did, maybe you'd be a very valuable asset for the crypto-market; always keeping people out of harm. :)

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Thank you cryptosharon, You are right a lot of people are tricked into joining these groups only to find out that they can never win.

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I wish there were more info out there to counter this. The cryptocurrency market is filled with doubt and uncertainty due to its novelty and a lot of scams are happening. I don't think cryptocurrencies can become mainstream until people are educated about these scary tactics and the ways in which cryptocurrencies put their money in danger.

A lot of people think that its cryptocurrencies that are dangerous, but I think that with education the risk can be minimized.

Nice Bor, this is a nice blog upvoted you not because I have to but because I showed interest in it

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I am glad you found it interesting

Great information. Nice post.

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Thank you.

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I do my best to please, thank you for the compliment.

Excellent information, and layout. Wow!

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Thank you, it took me quite a while to get the right look, but I am very happy with it.

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Thank you, I am researching more on those pump 'n dump groups, it really is fascinating stuff. There are 2 pumps scheduled in about 15 minutes, gonna see what happends

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What happened??

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It was insane.. the price jumped in milliseconds to 9x the original price. With one of the pumps the price stayed at the pumped price for minutes and with the other pump the price dropped immediately.

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Wow, that's impressive. I watched a lesser one with a channel with a few thousand people. When they passed the link, I clicked it just to see the price changes. Surprisingly, they were just trying to buy cheaper and cheaper to get into the pump, so the only thing they did was raise the volume and lower the prices. I think they killed the coin in the process, lol.

But I've never seen such a scary one as the one you mention. I imagine the group leaders were super happy with that result. Rich in no time, sell to your followers, leave the party, create a new one with the sad remnants who think they just did it wrong this time.