$SOLV When a new cryptocurrency is launched, the creators or early insiders often buy a large amount of the coin themselves to artificially inflate its price. This creates the illusion of high demand and draws the attention of investors and traders. As more people start buying in, the price rises further, reaching the target level set by the creators. At this point, the company or insiders begin selling their holdings at the inflated price, effectively cashing out and collecting the investors’ money.
After a few days, weeks or months, they may repeat the cycle by purchasing more of the coin to drive the price up again. Investors who hold onto the coin during this time may eventually recover their initial investment if the price increases again, but many are left holding the coin when the price collapses after the sell-off. Those who sell too late often incur significant losses. This strategy is commonly associated with pump-and-dump schemes, which are prevalent in the world of new or speculative cryptocurrencies.
