What is Pumping in Cryptocurrency and Stock Market
What does Pumping mean in Cryptocurrency? Have you heard what is pump and dump in bitcoin or cryptocurrency and that term confuse you. Here is what it means.
Meaning of Pumping in cryptocurrency is the buying of cryptocurrency by the people (more often called as Whales of cryptocurrency). When some specific coin pumps people also name that term by putting the name of crypto before the coin pumping. Like if Bitcoin is pumping they call it Bitcoin pump, Tron pump if Trons are pumping, Stellar pump etc.
In pumping the Whales or people buy a coin in a huge amount at high prices, so as to elevate the price of the coin. Price of the coin is elevated because people start thinking that the coin is in demand. They think that the price is already increased and maybe increase more. FOMO cover them up and they started buying at high prices. While these Whales sell off their coins at this high prices and get that profits. It’s the other people who get trapped and bought the overpriced coin.
While Pumping and Dumping are illegal in the stock market as we are talking about the cryptocurrency or virtual market. As it is not regulated by the government, hence it is a prime target for scammers. Whales often do Pump and Dump to manipulate the price of the coin and do buy and sell for profit.
To read how the price of a coin or ICO is decided please read this article.