Pump and Dump
A market manipulation scheme where the price of an asset is artificially inflated through misleading statements, then sold off at the peak for profit.
Why It Matters
A pump and dump scheme involves artificially inflating a cryptocurrency's price before selling off holdings at a profit, often harming unsuspecting investors. Recognizing this tactic is crucial for avoiding scams and making informed decisions in trading.
Example
For instance, if a group buys a little-known coin and promotes it heavily, the price spikes as others buy in, but once they sell, the price crashes, leaving late investors with losses and empty promises.
Beginner Context
For newcomers, understanding pump and dump schemes helps navigate the often volatile nature of cryptocurrency markets. It underscores the importance of doing thorough research before investing.
Mike Starr
Founder, CryptoWizardTools · M.S. Organizational Management
Last reviewed: August 2026
Related Terms
Wallet
Software or hardware used to store, send, and receive cryptocurrency. Wallets store private keys that prove ownership of digital assets.
Ethereum
The second-largest cryptocurrency by market capitalization and the leading smart contract platform. It enables developers to build decentralized applications and supports a wide ecosystem of DeFi protocols and NFTs.
CEX
Centralized Exchange. A cryptocurrency trading platform operated by a centralized company that acts as an intermediary between buyers and sellers.
Hash
A fixed-length string of characters produced by a hash function. In blockchain, hashing is used to secure data and create block identifiers.
Cross Chain
Refers to the ability of two or more separate blockchains to communicate and exchange data or assets with each other. Cross-chain bridges enable tokens to move between networks like Ethereum and Solana.