What is Pump and dump?
Coordinated buying to inflate a small coin's price, marketed as organic momentum, followed by the organisers selling into the buyers they attracted. Illegal in regulated markets; endemic in unregulated ones.
A pump and dump is coordinated theatre: organisers accumulate a thin coin quietly, ignite a buying frenzy — signal groups, influencer posts, fake news — and sell into the crowd they summoned. The chart's vertical spike is the product; the dump is scheduled before the pump begins. In regulated securities markets this is straightforwardly illegal manipulation; in crypto's unregulated corners it operates openly.
The structural tell is liquidity: pumps need coins thin enough for modest money to move violently, which is why targets are micro-caps, not Bitcoin. The participant's maths is worse than it looks — even "getting in early" on a signal group means being the exit for whoever ran the group; that's the business model. A vertical chart on a coin you'd never heard of an hour ago isn't opportunity knocking; it's the dump looking for its counterparty.
See it in practice
Related terms: Memecoin · Wash trading · Liquidity · full glossary
FAQ
Is pump-and-dump illegal in Australia?
For financial products, yes — market manipulation carries serious penalties, and ASIC has warned explicitly about crypto pump groups. Enforcement in offshore, unregulated tokens is the practical gap the schemes live in.
Can't I just ride the pump and sell before the dump?
That's every participant's plan, and the organisers' edge is knowing the schedule you're guessing at. The dump takes seconds and the exits jam — the game is designed so its players fund it.
General information only, not financial advice. Definitions are maintained in our fact database and reviewed with the daily rebuild.