Elementor #5303

PUMP AND DUMP SCANDALS, HOW TO AVOID IT!

WHAT IS PUMP AND DUMP?

 “Pumped and dumped” is an age long scheme where big traders come together to plan price hike to bag a quick profit.

These scams target cryptocurrencies with low market capitalizations that are simple to manipulate and have minimal trading volumes. enthusiasm and false information about a coin are circulated on social media to drive up prices of their target tokens

This buy charade does not last for a day as these big players quickly remove at least 80% of their investment which most times will lead to a quick sell off leaving their community with bags of sometimes, worthless tokens whose value may never increase in the long run.

Since its inception, many Cryto investors and retail traders have been victims of these scheme. In this article I will guide you through how to I identify a pump and dump scheme and how to avoid it.

HOW TO IDENTIFY A PUMP AND DUMP SCHEME

The simplest method to spot a pump and dump strategy is when an unidentified currency unexpectedly increases significantly without a valid explanation. An easy way to see this is on a coin’s pricing chart.

Additionally, a small cap coin pump may be indicated by the appearance of paid news articles about it together with an increase in social media activity related to that specific cryptocurrency project. One should exercise caution if an unheard-of coin with a market cap of just a few million dollars suddenly starts trending on Twitter and Facebook.

If you get an unsolicited email promoting a cryptocurrency, it may just be pump and scheme coming your way. Pump and dump con artists try to reach as many people as they can to encourage investment in their target securities. Sending millions of unwanted emails to potential targets is one of the simplest ways to accomplish this.

Pump and dumps are illegal in the stock market, but there are no approximate regulations against these acts however, The Commodity Futures Trading Commission has revealed that it is providing financial incentives for individuals who come forward and report pump and dump organizations.

When next you see a coin or token over hyped on social media you might want to check Coinmarketcap or any other platform or might want to read their whitepaper to understand their road map and see if the have any real utility or if it is a “dump trap”

EVERYTHING YOU NEED TO KNOW ABOUT CRPTO CURRENCIES

What ever your learning style is we have put together an introductory course that contains everything you must  know about crypto currencies, DEFI and WEB 3 in the link below

https://cryptofreshersguide.com/Have a great time learning.

Also remember that trading crypto currencies are risky and funds can be lost if traded carelessly, readers must understand that trading crypto currencies should be properly learnt.

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