A pump and dump is a fraudulent market manipulation tactic where a group of traders artificially inflate (pump) the price of a cryptocurrency through hype, false rumours, or coordinated buying, only to sell (dump) their holdings at the peak, leaving other investors with worthless assets.

How It Works:
Organisers Accumulate Cheap Coins – Scammers buy low-cap or obscure cryptocurrencies at low prices.

Hype Phase – They spread misleading news, fake endorsements, or social media buzz to lure retail investors.

Price Surge (Pump) – As more buyers rush in, demand skyrockets, driving the price up artificially.

Mass Sell-Off (Dump) – Once the price peaks, the orchestrators sell their holdings, causing a crash and trapping late buyers with massive losses.

Why Crypto Is Vulnerable:
Low Liquidity – Small-cap coins are easier to manipulate.

Lack of Regulation – Crypto markets have fewer safeguards than traditional finance.

Social Media Influence – Fake influencers and anonymous groups (e.g., Telegram "pump groups") exploit FOMO (fear of missing out).

How to Avoid It:
Be sceptical of sudden price spikes with no real fundamentals.

Avoid coins promoted by anonymous sources or "guaranteed profit" schemes.

Research projects thoroughly before investing.

Pump and dumps are illegal in regulated markets, but in crypto, they remain a persistent threat, making vigilance essential for traders.