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Crypto Glossary/Pump and Dump

Pump and Dump

A form of market manipulation where the price of an asset is artificially increased to generate interest before selling it to new entrants.

A pump and dump is a market manipulation tactic used in both stocks and crypto markets, where bad actors artificially “pump” the price of an asset to generate interest and cause FOMO.

The end goal for these bad actors is to sell or “dump” their entire stock to these new entrants, at inflated prices, leaving them holding bags.

While such manipulation is illegal and often punished in traditional markets (re the Wolf of Wall Street), the crypto space is yet to be properly regulated.

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