Pump and Dump (P&D)

Pump and dump refers to a deceptive practice where a trader or investment firm acquires a significant amount of an asset, often illicitly, and subsequently promotes or “pumps” the asset’s value using misleading information to attract unsuspecting investors. After inflating the price, they “dump” (sell) their holdings at a higher price, often resulting in losses for subsequent investors. In cryptocurrency markets, this scheme is frequently executed by whales who accumulate a large quantity of a specific crypto asset to pump its price and profitably sell their holdings.