How to profit from a cryptocurrency pump and dump (2024)

How to profit from a cryptocurrency pump and dump (1)

Pump and dumps are one of the biggest scams in the cryptocurrency industry. They are also one of the quickest ways to make a profit.

It is a scheme involving the artificial inflation of a crypto assets value right before a planned and sudden crash.

Like a standoff in a classic Western — to win — you need to be the fastest.

The key to speed: automate your trading strategy.

Today, I am going to teach you how I automate my trading strategy and how you can use it to profit from a pump and dump. I will showcase a very cool example and reveal how you can get involved.

“He’s meaner than a rattler and twice as fast with them pistols!“ — The Outlaw Josey Wales

Let us start by answering some of those burning questions that you have.

Nope! Cryptocurrency still remains largely unregulated and since the SEC does not class Etherium-like cryptocurrencies as a security, that means anything goes.

Groups of investors found mostly on Telegram and occasionally on other social platforms like Discord, WhatsApp, Twitter, and Facebook.

It is a six-step process.

Step one: find a low cap asset and begin accumulating tokens over time. Make sure to do this slowly or you could cause a premature spike in the price.

Two: convince a group of investors of your plan. Whisper of riches beyond their wildest dreams and once you know they have been hooked: tell them to wait on buying the asset until you make the call.

Top tip: don’t tell them you bought a sh*t load already.

Three: gather people until there is enough buying power to move the needle. Most coins will not take much to manipulate.

Ready… GO.

Four: make the call. Tell your investors to buy the asset, that will cause the price to explode.

How to profit from a cryptocurrency pump and dump (3)

For maximum effect: spread word of the rallying coin across other crypto communities to help inflate the price further.

Five: sell all of your holdings. Others will follow on in a panicked rush— triggering a complete crash of the price.

How to profit from a cryptocurrency pump and dump (4)

Six: while some walk away with profit, others stare in confusion at their worthless bags. Meanwhile you’ve made a quick getaway.

Luckily, there is a way you can get involved without having to run an elaborate scam group.

Start by joining a couple of pump and dump Telegram groups — you can find some of them here: https://safetrading.today.

Great, that you’re in them, keep an eye on the feed. Suddenly out of nowhere people will start shilling assets with a low market cap.

Boom, the game is on. Open up the graphs and chances are you will see that asset has started rallying hard.

Let’s look at an example

REQBTC had a massive pump and dump few weeks ago.

November 5th, 9:00 am — the call was made and the pump began.

Organizers shilled the asset across hundreds of online communities causing the price to rapidly increase.

How to profit from a cryptocurrency pump and dump (5)

Seeing an opportunity to enter, I pull out my phone.

The strategy

1 Buy, 5 Targets and 1 Trailing Stoploss. Simple but effective.

Here is what that strategy looked like before I entered the pump.

How to profit from a cryptocurrency pump and dump (6)

In case you don’t know, this is Signal: It makes following strategies like this a breeze and allows you to do things which would otherwise be impossible to do on just the exchange.

Many tools exist to help you automate your trading strategies, but I use Signal. It’s fast and easy to use. If you want to check it out, I’d appreciate it if you’d use my link. Thanks!

… Back to the example. I entered a position at 126 sats with an investment size of $1,000.

Skyrocketing, REQBTC reached 160 sats within the first minute and triggered my first Target. Less than 3 minutes later, Targets 2, 3 and 4 have also hit. I was at 61.2% ($612) total profit.

Target 5 never hit, but that’s not too bad. When the price fell it triggered my Trailing Stoploss — selling my remaining balance for a profit.

The beauty of a Trailing Stoploss…

Using a Trailing Stoploss during a pump and dump is honestly like having superpowers.

With a trailing deviation of 10%, I was already guaranteed to leave with a profit from the moment the price crossed 138.6 sats — the breakeven point.

Triggering at 341 sats (~10% lower than the peak), I walked away with a 170% profit on my remaining $100 left to be sold.

All in all, I left with a grand total of $872 profit. Nice.

It involves quick reflexes, automation and a little luck, but you can make more in 30 minutes than most traders do in a month. They’re addicting too. Once you’ve tried one you will wonder how you ever lived without them.

Over my years of trading, I have never found a tool simpler to use or as enjoyable as Signal. I trade mostly on mobile too, since an opportunity to trade could happen at any moment, it is very convenient to have Signal with me wherever I go.

I should also mention that, as a Canadian 🇨🇦, I also trust them more. Knowing that they are based out of Kitchener, Ontario makes me feel more comfortable about connecting my API keys more so than any other automation tool I have tried, besides, we Canadians do like to stick together.

If you learned something new today and are interested in signing up for Signal then I would really appreciate it if you could use my referral link — it won’t cost you a cent more and will help me stay caffeinated as a I write these articles!

How to profit from a cryptocurrency pump and dump (2024)

FAQs

How to profit from a cryptocurrency pump and dump? ›

Mechanism of Pump and Dump Schemes

This is when investors who have invested in worthless assets and are in on the pump and dump scheme will sell or “dump” the shares of those overvalued assets. These investors profit from selling the asset at many times more than the price they purchased it at.

How to profit from pump and dump crypto? ›

Mechanism of Pump and Dump Schemes

This is when investors who have invested in worthless assets and are in on the pump and dump scheme will sell or “dump” the shares of those overvalued assets. These investors profit from selling the asset at many times more than the price they purchased it at.

Do crypto pump and dumps work? ›

Pump and dump schemes are a nasty breed of crypto scams promising ridiculously high returns. These scammers leverage psychology to trap victims, playing on their emotions by dangling a carrot (read: “Get rich quick”). The victims often take the bait out of their fear of missing out (FOMO).

How do you make a profit with crypto? ›

Buying and holding Bitcoin as a long-term investment — or, as some crypto enthusiasts call it, HODLing — can be a low-effort way to make money in the long term, as long as its price when you finally sell it is higher than the price at which you bought it.

How do you catch crypto pump and dumps? ›

Pump and Dump FAQs
  1. Follow social media channels and find relevant information. Sharp and unusual price spikes are often mentioned in sites.
  2. Analyze charts. A sharp price spike followed by a collapse on coins worth less than a cent is a pump. Especially if it is based on false information.

What is the most famous pump and dump crypto? ›

What is the most famous pump-and-dump crypto scam? One of the biggest pump-and-dump crypto scams was the Squid Game token scam. Developers claimed they would create a game based on the popular show “Squid Game” and sold tokens to that effect.

How to catch a crypto pump? ›

By fairly assessing lower market cap coins, you will be able to look at the pumps from a comfortable position and be on top of the wave when it starts. So start dig into the lower levels of the CoinMarketCap dashboard and find yourself among some crazy price action.

How long do crypto pump and dumps last? ›

How long does a pump and dump last? That depends on what the pump and dump groups agree on, some only last a few minutes while others can last a few hours.

Are crypto pumps worth it? ›

Crypto pumps are a risky investment strategy. Beginners should be aware of the following risks before participating in a crypto pump: You could lose all of your money. If you buy a cryptocurrency that is being pumped, you could lose all of your money when the price crashes. You could be scammed.

Why is crypto pump and dump illegal? ›

Pump-and-dump is an illegal scheme to boost a stock's or security's price based on false, misleading, or greatly exaggerated statements.

Can you make $100 a day with crypto? ›

Making $100 a day trading cryptocurrency is possible, but it requires effort, patience, and discipline. Be sure to start with stablecoins, stay connected to the latest news, set realistic goals, choose the right exchange, and trade with a solid plan.

How do people make millions in crypto? ›

8 Proven Ways for Making Money with Crypto
  1. Mining. The most common way to make money with crypto is through mining. ...
  2. Staking. ...
  3. Trading. ...
  4. Investing. ...
  5. Lending. ...
  6. Earning Interest. ...
  7. Affiliate Programs. ...
  8. ICOs.

How much will I get if I put $1 dollar in Bitcoin? ›

1 USD equals 0.000017 BTC. The current value of 1 United States Dollar is -1.21% against the exchange rate to BTC in the last 24 hours. ​ The current Bitcoin market cap is $1.18T. ​Create a free Kraken account to instantly convert USD to BTC today.

How to start a pump and dump? ›

Buying up a lot of a stock that sells at low volume starts the process by pumping up the price. Once the share price in inflated, a scammer can show other investors that performance. If those investors are convinced the stock is hot, they'll buy in and pump up the price even further.

What is the pump and dump strategy? ›

Pump-and-dump is a scheme that attempts to boost the price of a stock through recommendations based on false, misleading, or greatly exaggerated statements. The favored medium of communication for traders involved in pump-and-dump is social media platforms or anonymized messaging apps like Telegram and Discord.

Is pump and dump illegal? ›

Most people know the adage, “Buy low, sell high.” Pump and dump schemes are a form of illegal market manipulation in which fraudsters buy stocks at a low price, then do a blast of marketing to get others to buy them and thus “pump up” the stock price.

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