$BTC $BNB $ETH Pump & Dump in Crypto
What is meant by the term pumping and dumping in crypto is when liquidity is pumped into a currency, which leads to an increase in its price, and then this liquidity is emptied from the currency and its price decreases completely. This happens when a whale that has a lot of liquidity, and it may be a person or an investment body, buys a currency with a lot of money. This leads to a very high value due to the high demand and the lack of increased supply. Consequently, others follow him and buy this currency and raise its price more and more. This rise continues until the whale is satisfied and starts selling. As a result of the intense selling pressure from this whale, the price drops and collapses completely as a result of the decrease in demand and the intensity of selling. This is simply the pump and dump principle.
But this principle is complex, and there are many different cases of it that occur in financial markets in general, not just crypto. But its basic idea is to inject liquidity into a financial asset to raise its price in an engineered and unnatural way in order to entice people to buy this asset and then start selling it violently. This is always done by market makers and many banks around the world in all financial markets. This is because these bodies own billions of dollars and therefore it is very easy for them to control markets and prices
