Pump and Dump
A coordinated scheme where a token’s price is artificially inflated, then sold off by insiders for profit, leaving late buyers with losses.
A pump and dump is a market manipulation scheme where a group promotes or aggressively buys a crypto asset to push its price up quickly, creating the appearance of sudden demand. Once enough outside buyers join in, the organizers sell their holdings into the rising price. The selling pressure often causes a sharp crash, leaving late buyers with losses. In crypto, this is especially common around low-liquidity tokens and memecoins, where prices can move dramatically from relatively small trades and social media attention.
It matters because pump and dump activity can make a token look more popular or valuable than it really is. Promotion may happen through chat groups, influencers, fake news, or viral memes, often using urgency such as “don’t miss out.” For example, a tiny memecoin might be heavily promoted on social platforms, rise several hundred percent in minutes, then collapse when early holders sell. Unlike healthy price growth driven by adoption or clear fundamentals, a pump and dump is usually short-lived and benefits those who entered before the hype.
Other terms in Memecoins
Bonding Curve
A pricing formula that automatically changes a token’s price based on how many tokens have been bought or sold.
Dev Wallet
A wallet controlled by a token’s creator or team, often used to hold supply, fund development, add liquidity, or manage launches.
Meme Cycle
A recurring pattern where attention, humor, social media buzz, and speculation push memecoins or meme themes through rapid rises and fades.
Memecoin
A memecoin is a cryptocurrency inspired by an internet joke, meme, or community trend, often valued more by social attention than technical utility.