How does pump and dump affect the price volatility of cryptocurrencies?

1 answers

• Sky Agency OnlineSep 26, 2024 · 9 months ago
  Pump and dump schemes can have a significant impact on the price volatility of cryptocurrencies. While I cannot speak specifically about BYDFi, it is important to note that these schemes are not limited to any particular exchange. When a pump and dump occurs, the sudden influx of buying pressure artificially inflates the price of a cryptocurrency. This creates a false sense of demand and attracts more investors who want to capitalize on the rising price. However, once the orchestrators of the scheme sell off their holdings, the price crashes, causing panic selling and increased price volatility. It is crucial for investors to be aware of the risks associated with pump and dump schemes and to conduct thorough due diligence before investing in any cryptocurrency. By staying informed and being cautious, investors can mitigate the impact of pump and dump on price volatility.
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