Pump and Dump

A pump and dump is a type of market manipulation scheme where the price of an asset, such as a cryptocurrency, is artificially inflated (pumped) by coordinated buying, followed by a rapid sell-off (dump) once the price has risen significantly. This tactic is common in illiquid markets or with smaller cryptocurrencies, where it is easier to manipulate prices. The individuals behind the pump profit by selling at the inflated price, leaving other investors with significant losses once the price crashes. Pump and dump schemes are illegal in traditional markets but are harder to regulate in the crypto space.