- Crypto pump and dump groups, which prey on newcomers, are back
- XRP, DOGE, and now PNT have pumped massively, leaving many holding worthless bags
- Crypto pump and dump groups were a menace in the 2017 bull run
It’s official – the plague of crypto pump and dump groups is back. In the last few days DOGE, XRP, and PNT have now all fallen victim to the practice which was prevalent during the 2017 bull run and caused many naive newcomers to lose their investment. With the cryptocurrency space suddenly seeing a rash of new entrants, unscrupulous scammers and making the most of their naivety and conning them into crypto pump and dump groups which only serve to enrich the creators.
XRP, DOGE, and PNT All Suffer
Crypto pump and dump groups were a scourge of the space in 2017 and 2018, but they are an almost inevitable part of a largely free and unregulated market. What made them particularly abhorrent was the way they preyed on newcomers to the space, luring them into the groups with the promise of guaranteed gains in a short space of time before pulling the rug from under them and leaving them either with nothing, worthless bags, or a heavy loss
We have seen the same situation playing out again in two different forms. Firstly we saw the WallStreetBets gang pushing Dogecoin up 1,000% in the space of a few days, leaving huge numbers of newcomers who bought at the top holding massively overpriced bags, just like in 2017. In a similar way to 2017 we see these individuals calling for the moon after it has already gone 1,000%.
Worse has been seen in recent days with XRP and PNT. XRP has pumped over 190% thanks to a concerted effort from a huge Telegram group called ‘Buy & Hold XRP’ (renamed ‘Pump XRP’), which at its peak had 200,000 users. An even more blatant crypto pump and dump was carried out on the relatively unknown coin PNT on Sunday which leapt from $0.5 to $6.40 within one minute, representing a 1,180% jump in just 60 seconds:
PNT then retraced 89% in a matter of hours, leaving those who didn’t get out in time facing a huge loss. Some of those who got caught up in this particular scam aired their experiences on social media:
PSA: I was foolish enough to participate in a pump and dump, believing that the collective power of the group would increase the price of $PNT. And sure it did… for like a few seconds. Only the organisers know the coin before hand so no doubt it’s a scam to get them rich!
— Heisenburgled (@heisenberglar) January 31, 2021
Crypto Pump and Dump Groups Are Just Another Scam
Crypto pump and dump groups are organized by a small number of people, usually just one or two, who coordinate a mass buy of a coin at a particular date and time, shooting the price up, before executing what is supposed to be a coordinated sell. However, the group leaders sell at a lower price than the stated target, pulling the rug on group members while netting a very healthy profit.
It’s not surprising therefore that our advice is to stay away from crypto pump and dump groups – even if you think you’re going to get out in time, you don’t know the organizers’ sell targets, and any issue with your app, your internet connection, or your own execution will leave you with a massive loss.
Crypto pump and dump groups are, in short, a risk not worth taking.