The Business Behind Pump And Dumps: An Inside Look

Now while these Pump and Dump groups have started to lose effectiveness as the market cap for cryptocurrency grows which raises the amount of buying power needed to make movement in the market, they still have quite a bit of power and wealth behind them. Let us look at these groups and the business behind their wealth.  We will be looking at these from the perspective of an insider not quite at the top (no one up there would give us the time of day) but not at the bottom.



Despite what you may be led to believe in the structure of a pump group there are many facets of the business outside of the pumper and the admins.

You will rarely see a lone pump group as they generally work together either at a single fixed time or at a delayed rate.

For example, there will be an admin group filled with anywhere from 5-20 Pump Admins who’s creator/leader will decide upon a coin than by size the groups will announce the coin to whatever paid groups. Once the coin is announced to the paid groups it is given to the secondary members (people who are connected to the paid groups through members who share the information in smaller branch groups). Then finally it hits the pump groups that are open access, by then the coin will have gone up quite a bit before the members get involved.


Who has and where is the money?


  • Pump Admin Group Leader – They make their money by buying the coin in significant quantities before the pump group even comes to being or during a period where there is a charted time difference (where the large buy is no longer visible in the 48-hour charts) in the group. Some admins do votes to choose the coin, in this, they give the appearance of no early buys. However very often the admins and those who have access to the voting information will either buy all of the possible winning options of the coin or they will buy the clear winner before the vote is up.


  • Pump Admins – They will buy the coin before the announcement (not a pre-pump, generally not even a blip on the radar). They also make money by charging less savory ICOs for “marketing” to build up their telegram group size. They also make a profit from selling ad space to smaller pump groups.


  • Paid and Insider Groups – They make their money from buying in early and hosting their own small pump groups.


  • Pump Groups – They generally have a small early and botting percentage that makes money. Often Pump Admins will skew vote results by closing voting early to give the illusion that quite a few people made big money.  Mathematically, someone had to lose, and it can’t always be the people that fear missing out (and bots of course).


  • ICOs – Many ICOs grow by thousands of membe1rs when they are advertised on pump groups. However, as all ICOs soon realize, you can’t buy traffic. The pump groups members will often be unruly and cause issues for all of the involved parties.


The Racket

There are some darker aspects in the pump and dump groups that a very small number of groups use but have been growing in number.


Outside of the regular structures, they run by, they also have some darker elements.

These elements include threatening small to medium sized ICOs with report spamming their telegram groups, advertising the ICO and then demanding payment despite the hardship it causes (it is useful enough that it does turn a profit).


A much darker thing that the groups have been used for in recent times is using P&D’s as a pseudo mixer. Some shady pump groups will provide cryptocurrency at a discounted rates to insiders. These coins are generally tainted with some illicit transactions and the clean (in comparison) bitcoin of the insider is enough to add an extra layer of anonymity to the transactions.

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How To Make Money Investing In Crypto

Identifying the risk of an investment is what makes or breaks an investor. This goes doubly so for cryptocurrency investors. When investing in cryptocurrency, you will find the risk of your investment is directly correlated to your returns. Examples of this can be found in the many ways people invest in cryptocurrencies. The methods that are very popular at the moment of writing this article are ‘Hodl’ Investing, Pump and Dumping, Bitcoin Purism and “ICO Investing”. In this article, I will cover common usage of these methods, my usage, strengths and weaknesses, and risk in each of these investment methods.

Bitcoin Purism

Picture of a Coin With BTC Logo

Bitcoin Purism is by far the oldest out of the cryptocurrency investment methods. It is in its simplest forms only investing in Bitcoin. The reasoning behind this method can be attributed to the reliability of Bitcoin, the belief that altcoin investment is a bubble and/or the belief that bitcoin will hit $10,000 in the not so distant future.

Statistically, those who have held Bitcoin, have had the opportunity to make a profit. Despite the volatility of the market, Bitcoin has gone up at a rate unprecedented. [Don’t believe me? Here is a link to a calculator that tells you how much your coin could have been worth] Along with this, Bitcoin holds the largest backing of a cryptocurrency as of the writing of this article. This allows for the risk of this investment method to be rather low in my opinion.

I personally buy Bitcoin almost religiously, I have personally made a profit using this method, I, however, do not ascribe to the belief that bitcoin is the one true coin (However I do not deny it’s gloriousness)

“ICO Investing”

A Picture of a bunch of different coins that were people are investing in


“ICO Investing” is where investors invest in a cryptocurrency that offers a new technology (most of the time), the coin is premined and sold with an Initial Coin Offering which allows for both the developers to make money as well as those who were on the inside of the coin before sale.

This market is a very risky market as very rarely (almost never) do coins retain their ICO Price (or go above it outside of rare situations).

I personally do not ascribe to ICO Investing, however, some of my friends do ascribe to it and have made money identifying “Heroes’ from “Zeroes.”

‘Hodl’ Investing

‘Hodl’ is the popular memetic way of saying to hold a coin until it reaches a point of high returns. Really this is pretty cut and dry.

For the many I know that use this method, most are still ‘hodling’. However speaking from an article I read on Reddit (I will link once I find it here), investing in the top 20 coins will yield high returns. It can be a risky business if you are not careful with this method.

I personally do ‘hodl’ some coins but I do it out of vested interest in the companies outside of direct financial reward. These coins were covered by a guest writer in an article here. I have ‘hodl’-ed in the past and have made a good profit off of coins such as NMR and XMR.

Pump and Dumping

This investment method is hated by almost everyone. However, it gives one of the highest returns on the market paired alongside with the most risk. Pump and Dumps are made of two kinds of investors, the suckers, and the winners. Pumping and Dumping are where people all begin buying a coin at once artificially raising the price of a coin, often bringing the attention of investors on the exchanges which in turn raises the price by a great deal. At this point, the pumpers begin dumping the coin for BTC, with the last to dump either ending up at a loss or at a marginal gain. It also leaves the coins’ market in a mess with the investors being stuck with a bunch of “shit”-coin as it is commonly called.

Often the pumpers are also at a sort of loss with some pump groups prepumping a coin then providing the coin to the group allowing for the pump group owners to make often double the profit of a coin.

The risk is very high, but the returns if done with the right pump groups at the right time you can make anywhere from 10% to 1000%. I recommend automating the sell at a fixed percent over your buy so that you can get out safely without ending up with a worthless coin.

While I do not like what this does to the market, I have on occasion participated in a few pumps.

Warning, Before you Participate in a pump, make sure to check what cryptocurrencies are classified as in your location. You may want to consult with a lawyer (or the internet) to check if what you are doing is considered market manipulation where you are.


Each of these investment strategies has their own risks and rewards. Please do your due diligence with investing. LBTC, It’s Associates and Its writers are not responsible for any losses occurred using the following methods. However, if you do make a profit please don’t forget us 🙂 Be honest and share!

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