Pump Crypto Is An Asset Purchase, Here's The Explanation!

Pump Crypto Is

In the world of crypto trading, there is a term called pump crypto. The term comes from pump and dump, an activity that has its own meaning.

For Vicigers who are already involved in the crypto world, they may have heard the term pump and dump crypto.

This time, VCGamers will discuss what pump crypto is, a term used in crypto pump and dump activities. Come on, see the discussion below!

Also Read: Careful! Explanation and Dangers of Crypto FOMO!

Pump Crypto in Pump and Dump Terms

Crypto Pump and Dump illustration
Crypto Pump and Dump illustration. Source: TradingwithRayner

Pump and dump crypto has the meaning of activities that a party does to increase the price of a crypto asset. Then, they blow the asset to a low price.

These strategies often bring losses to traders and investors. Pump and dump is often used to carry out scams that only benefit one party and harm the other party.

Vicigers must know about the meaning and operation of pump and dump so that they can be found and avoided if one day this pump and dump occurs.

As the name suggests, pump and dump is a trading strategy aimed at a crypto asset. Pump is the start of this activity, namely buying a crypto asset on a large scale.

It aims to increase prices and market demand. After the price rises and there are many interested buyers, the party dumps.

Dump is the end of this activity, namely selling the assets that the party bought on a large scale again. This makes the price of crypto assets drop very drastically.

Also Read: Easy! Here's How to Calculate Crypto Profits

How Crypto Pump and Dump Works and Examples

Crypto Pump and Dump Example
FaZe Clan Pump and Dump Crypto Actors. Source: The Daily Dot

The majority of these strategies are implemented by various parties who have a big role in the crypto market. They can do this pump and dump in a short time, around minutes to seconds.

Because of this, small-scale traders will find it more difficult to get out of the crypto pump and dump scam trap.

Pump and dump has an organized and structured way of working. The parties in this group will discuss to plan pump and dump activities from the days before the execution.

This group will collect crypto assets when volumes are still low, namely pumps. After that, the group will determine the time to carry out the dump.

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One example of pump and dump activities is several members of a large esports organization from the United States namely Faze Clan.

According to theScore esports, the FaZe Clan members include FaZe Kay, FaZe Jarvis, RiceGum, to Sommer Ray.

They promote crypto assets under the name SaveTheKids which has a goal to help abandoned children around the world.

The promotion gave a sizable result because a lot of people were interested and finally got a lot of buyers.

The large number of buyers causes the price of these crypto assets to increase. After that, the group actually sold the assets and fled, despite promising to set aside the profits from the crypto assets for donations to abandoned children in the world.

These assets ultimately have no value because they have dumped, namely selling crypto assets on a large scale when prices are high.

Also Read: 5 Best Crypto Mining Machines in 2022

How to Avoid Pump and Dump

Avoid Pump and Dump Crypto
One Example of Pump and Dump. Source: Empirical

For Vicigers who are afraid of pump and dump, don't worry! Here are tips so that Vicigers can avoid pump and dump.

First, avoid FOMO which means Fear of Missing Out. Vicigers must be responsible when trading and don't invest just because you want to join in.

Apart from that, Vicigers definitely have to do some research before trading. Take a look at the whitepapers, offers, origins of the creators so that you can guarantee the safety of these crypto assets.

Finally, Vicigers must be careful and vigilant when it comes to Initial Coin Offerings or ICOs. Vicigers should pay more attention to newly sold crypto assets and projects on the exchange.

Thus the discussion of pump and dump. Be careful when trading crypto, do your research, and avoid FOMO.

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