📈 Pump: Definition

📈 Pump: Definition

A "Pump" refers to the artificial increase in the price of an asset (such as a cryptocurrency, stock, or NFT), usually caused intentionally by a person or a group trying to manipulate the market.

This often goes hand-in-hand with what's known as a "Pump and Dump" scheme — a well-known tactic that is illegal in regulated markets (like the stock market) but frequent in unregulated spaces like crypto.

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💡 How Does a "Pump" Work?

Here’s how a typical Pump (and Dump) happens:

1. Quiet accumulation:
   The people behind the pump (a group or a "whale" — a big investor) start buying the asset before the price moves up.

2. Creating hype (promotion):
   They begin spreading the word on social media, Telegram, Discord, etc.
   The goal is to generate hype and FOMO (Fear Of Missing Out) to get other people to buy.

   Example messages:
   "This token is about to explode 🔥", "To the moon 🚀", "Last chance to 10x your money!"

3. Price spike (the Pump):
   Because of the hype, lots of small investors buy in, which causes the price to skyrocket, sometimes by hundreds of percent in just hours.

4. Sell-off by the organizers (the Dump):
   Once the price is high, the organizers dump their assets (sell everything), cashing in massive profits.

5. Price crash:
   As soon as they sell, the price plummets.
   The last buyers (who got in late, following the hype) are left holding the bag — often with huge losses.

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🔍 Real-World Example (Crypto):

A group launches a token called $MOONX.

1. They buy $MOONX at $0.01.

2. They hype it up on Twitter and Telegram:
   “Next DOGECOIN! Don’t miss it!”

3. The price shoots up to $0.30.

4. They sell everything and make 30x profits.

5. The price drops to $0.02.
   Late buyers lose almost everything.

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⚠️ Why It’s Risky (and Often Illegal):

• Market manipulation: Illegal in regulated markets like stock exchanges.

• Information imbalance: Organizers know when to sell. You don’t.

• Unpredictable timing: No one knows exactly when the dump will happen.

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📌 Key Takeaways

• A Pump is an artificial price surge.

• It’s usually followed by a Dump, where most people lose money.

• It’s a form of market manipulation, often disguised as a hot tip or opportunity.

• Very common in low-market-cap cryptos or obscure tokens.

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