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Understanding pump schemes and overturned in cryptocurrencies
The world of cryptocurrencies has grown exponentially in recent years, with many people investing their money earned so much effort in this class of digital assets. However, along with growth comes a new set of risks that can make investors feel vulnerable and deceived. Two of these risks are the pump and overturned schemes: tactics used by the scams to artificially inflate the price of a cryptocurrency, only to sell to an inflated value once.
What is a pump and overturned scheme?
A pumping and overturned scheme is a type of market manipulation in which a group of individuals collizes to artificially inflate the price of a cryptocurrency, often through coordinated social media campaigns or online advertising. The objective is to create exaggeration and attract more investors to the market, which can lead to a rapid increase in prices.
How do bomb and overturned schemes work?
This is how it develops typically:
- Initial promotion : An individual or group creates a buzz around a cryptocurrency through social networks, forums and online communities.
- Price manipulation : The scams artificially inflate the price of cryptocurrency by disseminating false information, creating false news articles or publishing promotional content on several platforms.
- Increase in demand
: As more people realize the cryptocurrency, demand increases, which increases the price.
- Pumping and diver cycle : The scammers sell their holdings at the artificially inflated price, generating a sale of the sale.
Types of pump schemes and overturned in cryptocurrencies
There are several types of pump schemes and overturned in the cryptocurrency:
- SOCIAL NETWORK PUMP : Scammers use social media platforms to create exaggeration around a cryptocurrency through false publications, Tweets or Facebook updates.
- False news articles : scammers write and publish articles on websites, blogs or online publications about cryptocurrency, spreading false information to attract investors.
- Online advertising : scammers use specific online advertising campaigns to promote cryptocurrency to possible investors.
- Price manipulation through ICO (initial offering of currencies) : Staffing can manipulate the price of a new cryptocurrency spreading false information about their possible yields or legitimacy.
Warning signals of a pump and overturned scheme
To avoid being a victim of a pump and overturned scheme, be careful with the following warning signals:
- Inflation of unusual or inexplicable prices : If the price of a cryptocurrency increases rapidly without any logical explanation, it could be a sign of a pump and a dump scheme.
- Overwhelming demand : Be careful if the demand for a cryptocurrency suddenly becomes overwhelming, which leads to an increase in artificial prices.
- False news articles or publications on social networks : be skeptic of articles or publications that seem too good (or bad) to be true.
- Uncreated projects : Investigate the registration and legitimacy of the project before investing.
Protection of pump and overturned schemes
To protect yourself, follow these best practices:
- Perform thorough investigation
: Before investing in any cryptocurrency, investigate its potential risks and benefits.
- Verify information : Verify information about a cryptocurrency through good reputation sources before spreading it online.
- Unique cryptocurrency communities : Inactive with legitimate cryptocurrency communities to learn from experienced investors and avoid erroneous information.
- Be careful with unplayed promotions : Be careful with unplayed promotions or offers, especially if they seem too good to be true.
Conclusion
The cryptocurrency has traveled a long way from its beginning, but the pumping and overturned schemes remain a serious threat to those who invest in these digital assets. By understanding the warning signals of these scams, you can protect yourself from becoming a victim.