## What is a pump in cryptocurrency: how the popular market manipulation scheme works

Pump in cryptocurrency is one of the most common fraud schemes in the digital asset market. This practice involves artificially inflating the value of coins or tokens through coordinated actions by a group of individuals to attract inexperienced investors and lock in profits from their funds.

### How the pump and dump scheme works in cryptocurrency

The mechanism is quite simple and cynical. First, the organizers — usually the project creators or early investors — accumulate large volumes of the asset they need. At this stage, the price remains low, as few people know about the project yet.

Then an aggressive information campaign begins. Participants of the scheme spread attractive information on social media (often unreliable), create hype, and talk about allegedly upcoming partnerships or technological breakthroughs. The goal is simple — to inflate demand and raise the price of the asset.

When the price reaches a peak of popularity, insiders begin to sell their positions en masse. Their actions create an oversupply in the market, leading to a sharp price collapse. At this moment, late buyers who invested their money during the height of the hype incur significant losses.

### Why is this scheme so dangerous

Pump in cryptocurrency harms not only specific victims but also the entire ecosystem of digital assets. Such manipulations undermine trust in the market, deter honest investors, and slow down the development of legitimate crypto projects.

Late participants often lose 50–90% of their invested funds, as they do not manage to sell their assets before the price drop. The psychological impact is even more painful — investors feel deceived and avoid the market in the future.

### How to protect yourself

The main rule is to conduct your own analysis (DYOR). Before buying any asset, study:
- The founders and the project team
- Real news and official information channels
- Trading volumes and price behavior patterns
- Reviews on independent sources

Avoid assets that rise sharply without obvious reasons. Remember: if the offer sounds too good to be true — it is almost certainly a scam.

Invest in projects with transparent technology, a strong team, and real-world applications, not in speculative bubbles created to enrich insiders.