The Rise Of The Pump And Dump Groups
Initially, I wanted to write a full article detailing how "pump and dump" works and why it's important to be educated about it. But then I stumbled upon an excellent article, which not only explained it how it works, but also made a nice report over a few relevant pump and dump groups, what's really happening there and why you should be extremely cautious about it.
So this is basically just a shoutout to that article. If your are serious about cryptocurrencies, then spend 15 minutes reading that piece, because it can literally save you tons of money.
Just a teaser:
- pump and dump groups are basically market manipulators - you don't want to do that
- a pump and dump usually lasts a few minutes
- 90% of people inside those groups are losing money
- there is a strict hierarchy in some of these groups, with affiliate systems and MLM-like denominations (Minister, Ambassador, Top Promoter)
An interesting thing is that the vast majority of these groups popped out only in the last two months.
Steem on and stay safe!
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
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Yea, the only place I have ever done pump and dump tactics is in my gaming. It not only is way to risky but also hurts people in the real life when they are losing a lot of money just to make other people a lot of money... sad when you think about it.
At least there are things like social media... ie... Steemit that have the power to warn people about these groups.
I am on my way to check out the post you talked about. Have a good one, always good to see your posts.
EDIT: I thought I was going to a Steem post but none the less the link was a great bit of information on how to stay safe. As well as all the more reason to stay away from pump and dump people.
From what I Learned a lot of those pump and dump groups are formed by people who have an immense amount of the coins they are "pumping and dumping". Most of the time they bought them long before they even started forming groups. I have seen people do this in games as well as in stock market prices. Although now a days in the real world you could be looking at prison time if you are caught using these types of schemes.
I was thinking about this recently @dragosroua, nature has a habit of making the economic inefficient models obsolete, I am looking at this groups thinking trying to understand the incentive to join one such group and I just can't figure it out ..
Just found and article https://btcmanager.com/breakdown-cryptocurrency-pump-dump/ quite comprehensive on this theme, still not sure why people would want to join such a group..
it would really make sense for long term holders of a crypto currency as a quick way out, I figure.. wouldn't it ?
plain ol' greed
Pump o'clock :))) awesome article. This just shows that get rich quick schemes will never die and stupidity is eternal :P
so easy to forget at times, that stupid people actually do exist.. :p
90% of people inside those groups are losing money - that's right, I was one of those people a few times. Never gonna do that again!
Pump and dump is only profitable if you are in inner circle and buy altcoins a few days before pump and dump or if you are really lucky and buy exact altcoin a few minutes before pump and dump it during the pump
Some of the telegram chat groups I am in are just hilarious. The so called analysts and research guys sending up buy signals when a coin has already started an uptrend. The after the coin has retraced they send out the max price the coin reached and use that as their number to determine how much people are making on their calls. Laughable. Be careful all
Those groups are complete sh*t.
It makes me always sad when I realise how much scam is going on in crypto-land, simply because this will confirm all the scepctics of the Blockchain Technology.
For the more 'seasoned' crypto users, it easy to see through the scams though.
Most people fall for scams that has some kind of 'get rich quick scheme'.
Followed 5 of this groups on telegram for more than 2 months, just for fun not with a specific interests. There was just one thing that I have noticed after every pump they make: I post for the administrator of the group or something similar (I'm not sure) that encourage all the group members when the things was not going in the way that wanted. And believe me this encouraging posting appears after most of their pumping attempts, meaning that most of the group members didn't win for the pumping. After two months let me advice you: Stay way from them!!!
Interesting enough, i stumbled upon a good video talking about the same subject. Here is what i wrote about it, If anyone interested (https://steemit.com/cryptocurrencies/@phgnomo/lets-talk-about-pump-and-cumps)
Pump and dump groups os Just like piramid schemes... The last ones that arrive are the ones who get f****.
Dont do It. There is a good reason this kind of thing is a crime on traditional markets.
Some of the market manipulators have a significant impact on the digital currency as well as its value so that the fear of a large number of people to accept some of the currencies that are subjected to the process of pumping and unloading where he is threatened with the loss of a large part of his capital because the beneficiary of that process are (gang)