In every few days, around 200,000 strangers come online together to purchase cryptocurrencies also referred as altcoins exactly at 2 pm. Later in 30 to 120 seconds, they try to sell them. This is a dense world of altcoins called ‘pump groups’. The most interesting part is that participants here believe that they are the actual wolves but in reality, they probably turn out to be the sheeps.’Pumping is a process in which a large group of people agree to purchase a certain coin at a particular decided time’. In the Pump group, there are a huge number of people buying a coin and then pumping the price of it. later in the dumping process, after the price gets high, the coins are sold at good prices.
The agenda of these pumping groups is simple, ‘buy low and then sell high’. But the reality is a bit complex one. The entire deceit goes something like this- Initially, the organizers grow their groups to an acceptable size of at least 2,000 people through promotions and scammed links. Then they direct the people to buy the coins by raising the price up. These coins are commonly called altcoins and are easy to make and are generally worthless. The organizer then elects a target price and later the participants decide these prices.
The group leaders are elected and they provide instructions to all the members related to the exact time of pump, what would be the pump signal, what would be the target price etc. As soon as the pump signal is given, the members buy the coins at the lowest possible prices and then dump them at higher rates.
Let us explore the entire scenario through this most recent Pumping signal example. Big Pump Signal declared the pump day on GVT on January 13, 2018. Thirty-four seconds before the pump signal, the coin was trading at a price of $29.22 and within 4 minutes and 16 seconds after the pump signal, it reached $35.05. The price reached the peak $45.41 in 9 minutes and 16 seconds post pump signal. Those who invested and dumped right at the peak could have earned a profit of 55.51%. This is the best case scenario that one can hope, but it is unlikely to happen.
‘Eighty to ninety percent lose and think that they just waited too long to sell and they can give it a try again’, said Chris Koerner, an altcoin expert in an interview. You only keep on losing money and the organizers end up making out a bandit as it becomes an addiction. Other than this loss, the organizers earn money from on more source as they charge the people for the group. This is how the whole gambling works and the people in the group remain unaware throughout about the entire scam.