A successful trader in the cryptocurrency market needs to be able to distinguish between Pump & Dump types. The result of participation in such auctions often depends on this, which means both profit and possible loss.
All pump and dump schemes can be divided into two main categories – short-term and long-term.

Short term Pump & Dump scheme

A short-term pump lasts from a few minutes to two or three hours and is designed for participants in a specific environment. As a rule, these are listeners of a YouTube channel, readers of a telegram chat or an exchange chat. Only the organizers make money on such a pump, because it is difficult for an ordinary trader to navigate in such a short period of time.

For such a pump, the organizers usually use a young, but already more or less well-known asset with a low cost. Sometimes even little-known cryptocurrencies are taken. Traders know that such assets often “shoot”. 

Therefore, they can also allocate part of their portfolio to such assets. This is the trick of the organizers – to give hope that just this very asset will “shoot” now. As a result, this happens, but for a short period of time.

It is not difficult for the organizers, having large amounts of funds, to purchase such an asset at a low price and create artificial growth. There is an opinion that it takes about 50-60 bitcoins to organize such a short-term scheme. If a crypto asset is little known and with a small capitalization, then even less – only a few tens of thousands of dollars. 

With large sales initiated by the organizers, the value of such crypto assets falls faster than that of more mature cryptocurrencies. Also, the lack of faith of traders in such assets contributes to a sharp decline in prices. In addition, novice traders are especially susceptible to such schemes, so here you need to follow the rules of trading and not enter into transactions on emotions.

Long Term Pump & Dump Scheme

A long-term pump lasts from a few days to a few weeks. After the “whales” have previously purchased and “pumped up” the course of the selected cryptocurrency, third-party participants in the trading process join the purchases. Nevertheless, at this stage it is still possible for the latter to have time to make a small profit. However, in the end, anyway, someone turns out to be extreme and incurs losses. Therefore, to participate, you need to be deeply immersed in the crypto asset movement schedule and not be distracted.

A long-term pamp is being prepared for several days; 

  • Firstly, already well-known assets are selected – the first TOP-50 or -100 rating. 
  • Secondly, false information about significant events is being spread.
  • Thirdly, positive forecasts and charts are offered for discussion by crypto communities. 
  • Fourthly, various methods are used to create a positive information background around the chosen cryptocurrency. 

As a result, the growth in the value of an asset can occur in several stages. The organizers, knowing this, can increase their profits several times in one Pump & Dump. 

To organize such a movement, a much larger amount of funds and people-performers are already required. The latter are often attracted to the scheme for “insider information”. 

As a result, such an organization will require from several hundred thousand to several million dollars. All this happens on exchanges that do not have licenses and regulation. Platforms that want to maintain their positive image are trying to track down such schemes and stop them.

Sometimes three categories are distinguished, adding a medium-term one – from several days to several weeks. In this division, long-term pampas are taken from several months to a year or a year and a half. Such long-term Pump & Dumps are extremely rare and require a huge amount of resource. Therefore, it does not make much sense to single out medium-term and long-term pumps into a separate category.