Pumpogdump

Pumpogdump is a term used to describe a coordinated price manipulation tactic in which a group of actors seeks to inflate the price of a security, token, or asset through misleading or hyped information (the pump), followed by rapid selling (the dump) to lock in profits. The term is commonly associated with low-liquidity markets such as microcap stocks and speculative cryptocurrencies, and is often organized through social media channels, private groups, or messaging apps. Participants may hold positions before the pump to maximize gains.

In operation, organizers or influential promoters seed optimistic rumors, exaggerated performance claims, or rumors of partnerships to attract followers. As demand increases, price rises and trading volume spikes. Once the price reaches a target level or the promoters decide earnings are sufficient, they unload their holdings into the rising market, sometimes layering sell orders to avoid slippage. The result is a sharp price spike followed by a steep decline as uninformed investors are left with devalued assets.

Legal status varies by jurisdiction. Market manipulation is illegal in many places when it involves securities, while regulation of cryptocurrencies differs by country. Exchanges may suspend trading, delist tokens, or pursue enforcement actions against involved parties. Regulators emphasize that intent to deceive and actual market impact—rather than mere price movement—are central to proving wrongdoing.

Investors can reduce risk by performing independent research, looking for credible fundamentals, and being wary of sudden gains accompanied by aggressive online promotion. Diversification and robust risk management are advised when participating in markets prone to hype-driven volatility.

See also: pump and dump, market manipulation, microcap stock schemes, cryptocurrency scams.