Pump-and-Dump
A market manipulation scheme where promoters artificially inflate an asset's price before selling their holdings to latecomers.
In-Depth Explanation
Pump-and-dumps are rampant in low-cap crypto markets. Promoters accumulate tokens cheaply, hype them on social media, and sell into the manufactured demand. The price crashes, leaving retail buyers holding worthless bags. While illegal in traditional markets, enforcement in crypto remains limited. Extreme gains promoted on social media are often pump-and-dump setups.
Related Terms
More in Trading & Markets
View all →Slippage
The difference between the expected price of a trade and the actual executed price.
Maximal Extractable Value
MEVValue that can be extracted by reordering, inserting, or censoring transactions within a block.
Sandwich Attack
An MEV extraction technique where an attacker places transactions before and after a victim's trade to profit from the price impact.
Frontrunning
Placing a transaction ahead of a known pending transaction to profit from the anticipated price movement.