In cryptocurrency trading, Pump refers to the price of a digital asset increasing, often at a faster pace or in larger moves than normal.
For example, traders will see the price of Ethereum (ETH) move 5% in an hour and say,
“Oh man, ETH is pumping! Let’s get in!”.
Social media news, such as news covered by Crypto Twitter, is often at the center of creating a lot of buzz around a cryptocurrency, helping to “pump” the asset’s price up.
Actors, celebrities, social media influencers, professional athletes, and tweets from Elon Musk have all been involved in pumping the crypto market.
Pumping can also take a negative connotation, describing the action taken by social media influencers where they “talk up” a coin or token, hoping to encourage their followers to buy the coin, helping to drive up its price.
This can be legitimate, whereby an influencer truly feels a cryptocurrency is a great investment because it exhibits some benefit not seen elsewhere or that it will see huge user adoption because of the current narrative in the community.
But more times than not, “Pumps” are followed by “Dumps”, where the influencer or a whale sells a coin for a huge profit after having just “pumped” it.
Price drops quickly, and other coin holders can’t “get out” of holding the coin quick enough.
This is called a Pump-and-Dump scheme.
