Showing posts with label pump & dump. Show all posts
Showing posts with label pump & dump. Show all posts

December 19, 2017

Whales at play - Pumps and dumps and Altcoin volatility

Cointelegraph - December 19, 2017 (www.youtube.com)


WARNING: This is an observation not FUD, HODL till the end.

All cryptocurrencies going from green to red in an hour is not a coincidence.

In the last 24 hours the cryptocurrency market has seen massive gains and then in the span of an hour, huge losses.

Is Wall street to Blame? Is it Whales from China? Or a new Mega Pump and Dump Group on Telegram.





Best place to keep your coins is a hardware wallet.
Ledger Nano S is the majority choice:
Ledger Nano S - The secure hardware wallet

November 27, 2017

Bittrex issues a warning about cryptocurrency Pump and Dumps

By Kai Sedgwick - November 27, 2017 (news.bitcoin.com)


Pump and dumps, which have long been synonymous with cryptocurrency markets, are facing a clampdown. Bittrex has emphasized its determination to combat the practice, which persists on several exchanges. In an update to its terms of service, Bittrex reiterated that it takes a dim view of pump and dump schemes, and will suspend accounts found to have been participating in such activity.

What Goes Up…


Pump and dumps were around long before cryptocurrency – and indeed the internet – became a thing. They can be traced back to the stock markets, as immortalized in Jordan Belfort’s penny stocks scene from The Wolf of Wall Street.


 In the altcoin era, there are mainly two forms these controversial schemes take:

Fake News: Using message boards, social media, and blogs, a particular cryptocoin is hyped and shilled, sometimes with screenshots of fake news regarding new platform developments, exchange listings, and mainstream partnerships. The aim is to get buyers to snap up the coins, thereby inflating their price before buyers who got in early can dump their holdings and perform a sharp exit. This behavior can take place over a period of hours, days, or weeks.

Flash Pumps: The other principal pump and dump involves members of a closed group who are all in on the scam. When the name of the coin to be pumped is announced, it’s a race to buy in and then dump it on the stragglers before they in turn do the same with buyers who come after them. It’s essentially a game of chicken: a contest to see who’ll blink first and offload their holdings. A huge vertical green candle followed by a corresponding red one characterizes flash pumps, which can rally and crash in a matter of minutes.

…Must Come Down


Telegram groups with names such as Crypto4pumps and Bigcryptopumps conspire to pick micro-cap coins with low volume, often on the Bittrex exchange. Currently the world’s second largest bitcoin exchange, with a 24-hour volume of $1.2 billion, Bittrex is a prime target. The site lists almost 300 coins and tokens, many of which have minimal sell walls, making them vulnerable to manipulation.

In a recent update to its trading policy, Bittrex announced that “stale” orders of more than 28 days would be removed and the minimum trading order size would be increased. It concluded with a “general statement about market manipulation tactics”, writing:

"Bittrex actively discourages any type of market manipulation, including pump groups.  Consistent with our terms of service, we will suspend and close any accounts engaging in this type of activity and notify the appropriate authorities."

Pump Up the Volume


Prohibiting P&Ds and preventing them are two very different matters of course. Coins that have rapidly appreciated in value are prominently displayed on the frontpage of Bittrex, luring in more buyers. Be it due to greed or FOMO, some traders blindly follow the green candles, chasing pumps with scant consideration for the reason behind the coin’s sudden spike.

Less charitable souls will say that investors who don’t perform their own research deserve everything they get. Nevertheless, as cryptocurrency goes mainstream, rampant manipulation of coins does little to endear the already volatile markets to new entrants. An influx of institutional money has helped the cryptocurrency markets swell to nearly $300 billion. The wild west days of the earliest bitcoin exchanges are long gone; perhaps it’s time that pump and dumps were also laid to rest.

Just a handful of the altcoins to be found on Bittrex.

Traders who recall bitcoin’s earliest days may shed a wry smile at the mention of such words as ‘Fontas’ and ‘trollbox’. It was a time when every coin had a small market cap and currencies such as Peercoin and Feathercoin were sent to the moon on Btc-e before plummeting into the abyss. For so long as illiquid coins continue to be listed on major exchanges, P&Ds will continue to happen. Newcomers to the space, who are intrigued by the get-rich-quick promise of such schemes, would do well to learn that the most profitable move is often to buy bitcoin and hold. It’s one of the few trading strategies that’s been shown to consistently pay dividends.

Images courtesy of Shutterstock, Bittrex.

Kai Sedgwick

Kai's been assembling words for a living since 2009 and bought his first bitcoin at $19. It's long gone. He's previously written white papers for blockchain startups and is especially interested in P2P exchanges and DNMs.

November 18, 2017

Pump and Dump - Know the signs when trading Altcoins

By Carter Graydon - September 07, 2014 (www.cryptocoinsnews.com)


Like penny stocks traded on the NYSE or those on pink sheets, cryptocurrency is a prime target for pump and dump scams. For those with buying power, it’s an easy way to get rich quick by inflating the price. For everyone else, nine out of ten times, you will lose. This is one of several reasons people are afraid to trust Bitcoin.

For those of you who don’t know how the pump and dump works, it’s fairly straight forward. They are also illegal in the market, though federal agencies do not actively protect Bitcoin users.

Pump and dump scams involve two groups of people. First there are the players who artificially increase the price of a coin by promoting or endorsing it. They’ve spent several minutes, hours or even days buying up cheap coins, and when they are ready to dump them, they build up the buzz.

As buzz around the coin gains momentum, trading volume increase and the coins value goes up. You are both the pump and dumper. Once the coin hits a desired price the players sell all their coins, and people begin to panic sell, dumping their coins on the market and sending the price plummeting.

It’s not too difficult to detect a coin that’s being primed for a pump and dump. You’ll often see buying patterns like the ones in this graph. The price is falling and rising just slightly each time the players buy, loading up on the cheap coins without drawing too much attention.


Once they’ve purchase the coins the players head to the forums and chat boxes to talk up their coin of choice. They’ll use several different accounts, and there can be many players involved helping make this look real. The  coin will be talked up until there is a buzz and people start buying – this is when the pumping happens. The chatter picks up on trading platforms, and people start purchasing the coin and pumping the price skyward. This fuels the buzz even further, and more people begin purchasing.

Once the coin hits a high point, the players will start selling off their coins, but not all of them at once – this signals the dumping process is about to begin. It can happen in a matter of seconds or be dragged out over hours. Players will sell small amounts of coins as fast as they can without dragging the price down until their out. Once the players are out, a panic sell begins, and this is when the dumping process happens. The price is no longer climbing the volume is down, and people start realizing their own sell orders aren’t getting filled. Panic sellers will sell below the market value just to get out, and this can send the coin’s value crashing to the floor.

The players are the ones getting rich, and they have the capital and knowledge to do so, but that doesn’t mean you have to lose out every time.

If you are able to spot a coin that’s being prepped for a pump and dump, you can purchase cheap coins yourself. If you were able to grab up some coins before the pump starts, you can make money if you’re not greedy. It shouldn’t be hard to make decent profit in five minutes if you’ve spotted the signs early.

If you come late to the party and the coin has already begun being pumped, but still in the early stages, you still can make a profit. Your risk will be greater and your profit smaller, but if your enter and exit fast the market fast you should be able to expect a modest return.

There are many people offering to “let you in” on the next coin to be pumped and dumped for a fee. Some people charge as little as .5 Bitcoins, but is it worth it?

Most of these are scams in order to get your Bitcoins. They will tell you what coin is going to be targeted but do nothing because they don’t need to. They have already made their profit. At .5 Bitcoins, with only five subscribers these people have already made over $2,000, which is about what you’d expect to make on pumping and dumping a coin, but now there is no risk.

Even if these offers for insider trading – that’s what it is – were real, and they did pump and dump the coin, you’d have to invest a significant amount of money to see a return of half a Bitcoin. Which means greater risk for you and a smaller return.

Always remember:

Buy the rumor.

Sell the news.

Information provided in this article is not intended to constitute an invitation or an inducement to engage in any investment activity. Featured image by Shutterstock. 

Posted by Carter Graydon
A UNC Chapel Hill graduate, blockchain enthusiast and analyst. I have a background in programming and IT, strong studies in econ, stats and game theory. Currently working as a Social Media Director and pursuing my MS in Online Marketing – busy!