Among the terms frequently used by investors in the cryptocurrency market are the expressions “pump and dump”. The Turkish equivalent of terms expressing artificially occurring value increases and decreases in cryptocurrencies is pumping and unloading. These are misleading transactions in the cryptocurrency market and investors should be extremely careful.
Spreading false news to manipulate the market affects prices positively or negatively. Pump and dump expressions are the movements created in the market with these fake news.
Impact of Pump and Dump on the Market
The cryptocurrency market is artificially inflated to create good marketing for an undervalued cryptocurrency. This is treated as a pump.
The pump methods used to influence the market are as follows;
1. Misleading news that does not reflect the truth
2. Social media posts
3. Spread the knowledge that there is a buying opportunity for the worthless cryptocurrency
Pump and dump are operations performed in groups, not by a single person. These groups, called market manipulators, buy cryptocurrencies at a high rate in agreement with each other and attract other investors by causing the market to start to rise. In this way, they continue to push the price up rapidly, increasing interest in the worthless cryptocurrency. Investors who do not know about the market, thinking that it is gaining in value, invest in this worthless cryptocurrency and thus the pump occurs. When the price reaches the level they want, they make a sale together and realize the value dream again. With this method, those who manipulate the market gain themselves, while investors who do not know much about the market lose.
Cryptocurrency traders need to be very careful with market manipulations like this. While guiding your investments, we recommend that you act with the advice of platforms and analysts you can trust.