Do you think pump and dumps are dump or just part and parcel of cryptocurrency trading? With the SEC and other news regulating bodies news on dump, this phenomenon may be curtailed. Once the coin hits a high point, the players will start selling bitcoin their coins, but not all of them at once — this signals the dumping process is about to begin. Mike Adams serves pump the founding editor of NaturalNews. And when bitcoin crypto currency market is crashing, it gets and a lot harder than Bitcoin.
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The coin of the day tweet was not me. This fuels the buzz even news, and more people begin purchasing. They are also illegal in the market, bitcoin federal agencies do and actively protect Pump users. The tone of the tweets dump showed that it was not John McAfee who was tweeting those recommendations. As you all know… I am not doing a coin of the day anymore!!!!
Pump and dump scams involve two groups of people. First there are the players who artificially increase the price of a coin by promoting or endorsing it. As buzz around the coin gains momentum, trading volume increase and the coins value goes up. You are both the pump and dumper. Once the coin hits a desired price the players sell all their coins, and people begin to panic sell, dumping their coins on the market and sending the price plummeting.
The price is falling and rising just slightly each time the players buy, loading up on the cheap coins without drawing too much attention. The chatter picks up on trading platforms , and people start purchasing the coin and pumping the price skyward. This fuels the buzz even further, and more people begin purchasing. Once the coin hits a high point, the players will start selling off their coins, but not all of them at once — this signals the dumping process is about to begin.
It can happen in a matter of seconds or be dragged out over hours. Players will sell small amounts of coins as fast as they can without dragging the price down until their out.
Once the players are out, a panic sell begins, and this is when the dumping process happens. Telegram , an instant messaging service founded by Pavel Durov, is being used by cryptocurrency scammers to coordinate pump-and-dump schemes, as reported by Business Insider.
These scammers create exclusive groups, in which they share information and organize attacks to make a profit off the losses suffered by unaware traders. The phenomenon of pump-and-dump is not uncommon in other trading venues either, particularly stocks and equities markets. In fact, the recent pump and dump plans in the crypto sphere may be being coordinated by outside forces.
The Russian app, Telegram , appears to be the main venue where the pump and dump schemes are being perpetrated. With names like PumpKing Community, Crypto4Pumps and We Pump, these communities provide a venue for scammers to attract participants who then help the price move. These channels offer information on specific coin pumps to those who subscribe and then encourage subscribers to buy in quickly.
After the glut of buying and the resultant price increase, members reach out in other social media, encouraging further buying from unsuspecting victims. The victims are left holding the bag, and the coin value often ends lower than it did before the scam.
The entire process is a scam from start to finish.