Updated: 3/2/2020 10:30GMT – added other information at the bottom..
In the aftermath of the WSB short squeeze social media presence, people were looking for other options like GameStop to make a lot of money in a short time. The question they didn’t ask was – “if it’s so easy to make money fast why isn’t everyone else doing it?”
This meant people starting looking at schemes like Crypto pump and dump (mass buying of a currency to artificially inflate the price and make profit when selling at the top). The problem with this is that there is no magic money tree. The money that is available to make in schemes like this, is not through squeezing hedge funds – it’s through the manipulation of other average people to buy into the crypto.
I have been monitoring a pump and dump called BigPumpSignals who now have roughly 200,000 members. The owners of groups such as these pick a currency to pump and then everyone buys it at the same time. The issue is you don’t all buy it at the same time.
The owners will buy first – getting their buys in at the lower price of the currency, and then the masses are called to pump the currency. The problem here is that the masses end up buying on the spike – some make profit but some will definitely make a loss. The losses by some are the profits by others – except the owners always make a profit.
The group’s also tend to try and raise social media awareness of how great this cryptocurrency is. When really what they want to do is get people to buy in near the top so they can take their profit at the loss of the people who bought in near the top.
It is a pyramid scheme. Those at the top will make profit, but the further you are down the pyramid the more you lose out. Just remember if you are making money of the scheme – where is it coming from? Most likely the people who have been manipulated by false promises of great profits.
Note: I am not a financial advisor. This is my opinion. Make your own decisions.