How does the pump and dump strategy affect cryptocurrency prices?

1 answers

• Nov 27, 2021 · 3 years ago
  The pump and dump strategy is a well-known tactic used by some traders to manipulate the price of cryptocurrencies. It involves artificially inflating the price of a cryptocurrency by creating a buying frenzy and then selling off their holdings at a profit. This strategy can have a significant impact on cryptocurrency prices, as it creates a false sense of demand and can lead to extreme price volatility. However, it is important to note that not all cryptocurrencies are susceptible to pump and dump schemes. Established cryptocurrencies with a large market capitalization and strong community support are less likely to be affected by such tactics. It is crucial for investors to conduct thorough research and due diligence before investing in any cryptocurrency to avoid falling victim to pump and dump schemes.
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