What is Pump and Dump?

These are two concepts that are often heard by those who invest in cryptocurrencies. What do these concepts mean for cryptocurrency exchanges? Interest in cryptocurrencies is increasing day by day. In particular, Bitcoin acts as the locomotive in the market compared to other coins and continues to increase the interest of people in the cryptocurrency world.

The high yield of cryptocurrencies attracts the attention of both small and large investors. In this article, we will examine the pump and dump method which is applied to gain profit from these cryptocurrencies but it includes some negativities.

Particular attention needs to be paid to this stock market movement, which may pose a problem for newly-introduced investors. The reason for this is that investors have many difficulties at the end of the transaction. Nowadays, Bitcoin Pump and Dump have become attractive in many forum sites and various speech groups.

In pump and dump transactions, groups of more than one person are included in the transaction of the determined coin at the same time.

How is Pump Dump

The pump dump system is almost impossible to do with one person, because, the main goal in this system is the purchase of high amounts of coins. Therefore, it is absolutely necessary to enter this application as a group. So, how does the application work? The price of the crypt currency, which is determined in high volume purchases made in groups, moves upwards. This event is called the Pump.

Pumps are short purchases under market price. In short, we can say that it is the process of pumping the price. Purchasing is made until the targeted prices are obtained. During the purchase, orders are given from the lowest figures. Then, when the price is reached, all coins are sold by the members. The process of selling coins at the peak of the price is called Dump.

These types of transactions, which are carried out as a result of the organized movement of the groups established on social networks, end with losses due to the inexperience of new investors due to the manipulation effect.