How Do You Spot and Avoid a Crypto Pump and Dump?

So you decided to dive into the wild world of cryptocurrency and bought a few coins that sounded promising. Now you’re hearing chatter on social media about the next big thing that’s going to skyrocket in price any day now. Everyone’s talking about how you’d be crazy to miss out on such huge gains. But here’s the thing—not all hype leads to a real payoff. Often these situations are what’s known as a “pump and dump” scheme to manipulate the market. The promoters hype the coin to drive the price up, then sell their holdings for a big profit and leave regular investors holding bags of worthless crypto. Don’t get fooled by empty promises of 1000x returns. Learn how to Avoid a crypto pump and dump,  so you can steer clear and avoid losing your hard-earned money.

Look for Sudden Spikes in Price and Volume

Spotting a crypto pump and dump scheme isn’t too tricky if you know what to look for. The first major red flag is a sudden spike in the price and trading volume of a coin. If a crypto’s price skyrockets for no obvious reason, that could mean it’s being artificially pumped up.

Scammers will coordinate behind the scenes to buy up a huge supply of a low-cost, low-volume crypto. Once they’ve accumulated enough, they’ll hype up the coin on social media and chat groups to dupe regular folks into buying in and driving the price up.

As soon as the scammers have made a profit, they sell off everything at once, leaving new buyers holding worthless bags. The price and volume crash just as fast as they rose.

Other signs a pump and dump may be in the works include lots of mentions of a random altcoin on sites like Reddit, Twitter, and Discord right before a huge price spike. The scammers are trying to generate buzz and get people FOMO (fear of missing out) buying. Promises of 1000x gains overnight are also a major red flag. Legit investments don’t promise instant, unrealistic returns.

The moral of the story? If something seems too good to be true in crypto, it probably is. Don’t buy into the hype of “the next Bitcoin” and do your own research before investing in any digital asset. With some caution and skepticism, you can avoid becoming another victim of these crypto scams.

Check the Project’s Fundamentals and Team

So you found a new crypto project that sounds promising. Before you invest your hard-earned cash, make sure to do your homework. One of the best ways to spot a pump and dump scam is to check out the team behind the project and evaluate its fundamentals.

Do some digging into the team’s background and experience. Legit projects will have teams with relevant experience, especially in blockchain technology and finance. Scams often have anonymous teams or ones with little expertise. See if the team is transparent by checking if they list their full names, photos, and links to their social profiles.

Evaluate the project’s fundamentals. Things like a detailed whitepaper, realistic roadmap, actual utility or value, partnerships, etc. Pump and dumps typically have unrealistic promises, no substance, and try to generate hype based mostly on the team’s promises.

See if the project has real-world utility. For example, a project for supply chain management, healthcare, gaming, etc. Speculative tokens with no clear use case are more prone to being schemes. Legitimate projects will have a viable business model and solution to a real problem.

Watch out for unrealistic hype, pressure to buy quickly, and promises of overnight success. Legit projects build interest through steady progress, not empty hype. Do research across various sources to make an informed decision. Don’t just buy based on a single recommendation on social media or elsewhere.

By doing thorough research into the team, fundamentals, and overall project legitimacy, you’ll avoid becoming the victim of a pump and dump scam. And instead, you may just discover an exciting new crypto project with real long-term potential. DYOR and trust your gut. If something sounds too good to be true, it probably is.

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Beware of Fake News and Hype on Social Media

Social media platforms are ripe for spreading misinformation and hype about cryptocurrencies. Unscrupulous people will try to manipulate the market by hyping up a coin to drive the price up before dumping their shares for a profit. Here are some tips to spot fake hype and avoid losing money in a pump and dump scheme.

Look for “Too Good to Be True” Claims

If something sounds too good to be true, it probably is. Be wary of people touting claims that a coin will “moon” or make you an overnight millionaire. Legitimate investments don’t promise instant riches. Promoters may claim a new technology will revolutionize an industry or that a famous celebrity has endorsed the coin. Do some research to verify the facts before investing.

Check the Source

See who is promoting the coin and what their credentials are. Are they blockchain experts and developers or just anonymous accounts? Promoters with little credibility are more likely to spread hype to manipulate the market. Legitimate coins will have transparent teams of real experts behind them.

Look for FOMO Tactics

Promoters often try to instill a fear of missing out (FOMO) to get people to buy in quickly. Be wary of claims that you have to invest right now before the price goes up or the opportunity is gone. Don’t fall for urgency and scarcity tactics meant to get you to buy on impulse rather than reason.

Do Your Own Research

Don’t just take someone else’s word that a cryptocurrency is a good investment. Do some digging on your own. Check the project’s website and whitepaper. Look for credible news coverage. See what experts in the crypto community have to say. Consider the coin’s purpose, technology, team, roadmap, and adoption rate. Make an informed decision based on facts, not hype.

By being skeptical of hype, checking sources, and doing thorough research, you can avoid risky pump and dump cryptocurrency schemes. Don’t get caught up in FOMO and impulse—carefully evaluate any investment opportunity before putting your money in. If something sounds too good to be true, it’s best to steer clear.

Don’t FOMO in Due to Fear of Missing Out

stay ahead in the volatile crypto market

FOMO Can Lead to Bad Decisions

It’s easy to get caught up in the hype surrounding a fast-rising crypto. The fear of missing out on huge gains can cloud your judgment and cause you to make impulse buys at the worst possible time—right before the dump.

  • Avoid buying in just because a coin is skyrocketing in price or getting a lot of attention on social media. These signs often mean you’re already too late to the party. The earliest investors have likely already made their profits and are ready to sell.
  • Do your own research to determine if the coin actually has long-term potential based on its technology, team, roadmap, and adoption—not just hype. If you can’t find a reason for its rise other than hype, it’s probably a pump and dump.
  • Don’t assume that just because a coin has pumped before, it will pump again. Patterns don’t always repeat, and previous performance doesn’t guarantee future results. Each pump and dump is a unique event.
  • Set price alerts or limit buy orders instead of buying in at market price during a pump. This can help ensure you don’t pay more than you intend to if the hype causes the price to temporarily spike. You may miss the peak, but you’ll also avoid buying right before the dump.
  • Take a step back and consider the big picture. Will you actually feel like you’re “missing out” if you don’t buy this coin right now, or are you just caught up in the excitement of the moment? Most likely, there will be other opportunities in the future you won’t want to miss. Stay patient and avoid emotional trading.

In the volatile world of crypto, FOMO is one of the most dangerous emotions. But if you remain rational and disciplined in your investing approach, you can spot the pumps, sidestep the dumps, and not feel like you’re missing out at all. Keep your eyes on the long game and don’t get distracted by short-term hype.

If It Seems Too Good to Be True, It Probably Is

If It Sounds Too Good to Be True, It Probably Is

When something seems too good to be true in the crypto world, it usually is. Be very wary of sky-high promised returns in a short period of time. Crypto scams are rampant, and pump and dumps are a popular way for scammers to quickly make money by manipulating the market.

  • Beware of “guaranteed” high returns. No legitimate investment can promise returns of 50% or more in a month. These scams prey on greed and naivety.
  • Watch out for time-sensitive offers. Scammers create a false sense of urgency to get people to buy in quickly without properly researching. Don’t fall for claims that you have to invest right now or you’ll miss out.

Do Your Own Research

Never buy a cryptocurrency just because someone told you to. Do your own research to verify the claims about the project before investing your hard-earned money.

  • Search online for the cryptocurrency’s name along with words like “scam,” “fraud” or “complaints.” See what comes up.
  • Check if the cryptocurrency has a legitimate whitepaper that outlines the project details, technology, team, roadmap, and tokenomics. No whitepaper is a major red flag.
  • See if the cryptocurrency team is transparent by looking them up on LinkedIn and other social media. Anonymous teams are common with pump and dumps.
  • See if the cryptocurrency is listed on any reputable exchanges. Being only available on obscure exchanges with little or no trading volume is suspicious.
  • Consider if the hype and marketing seem organic or manufactured. Overly aggressive marketing campaigns are common tactics with pump and dumps to generate FOMO.

By doing your own research, you can avoid the vast majority of crypto scams and pump and dumps. Never rush into an investment opportunity without verifying the details first. If something seems off, it’s best to steer clear. As the old saying goes, “If it seems too good to be true, it probably is.”


So there you have it. Now you know what to look for to avoid getting sucked into a crypto pump and dump scam. Stay vigilant, do your own research, and never invest more than you can afford to lose. Cryptocurrency is still the wild west, but if you go in with your eyes open and trust your instincts, you’ll be fine. Don’t get FOMO and rush into a coin just because it’s pumping. There are always more opportunities around the corner. Make a plan, set some ground rules for yourself, and stick to them. If it sounds too good to be true, it probably is. But if you find a solid project with real potential, hold on tight–you might just ride it all the way to the moon! The key is knowing the difference. Stay safe out there, crypto cowboys and cowgirls!

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