Pump and dump

A pump and dump is a form of market manipulation in which organisers buy a low-priced, thinly traded token, hype it to attract buyers ("the pump"), and then sell their holdings at the inflated price ("the dump"). Late buyers are left holding a token whose price collapses.

In crypto, pumps are often coordinated in Telegram, WhatsApp or Discord groups, promoted by paid influencers, or run by token creators who control most of the supply. Warning signs include sudden "100x" claims, countdowns to a "buy signal", pressure to act immediately, unknown tokens with tiny liquidity and promoters who do not disclose payment.

Most participants in such schemes lose money, because the organisers sell first. In regulated securities markets pump and dumps are illegal, and authorities in several countries have prosecuted crypto cases. Memecoin launchpads have made it easy to create tokens in seconds, and many collapse within hours of launch.