If you’ve been paying attention this weekend, you may have noticed a little, unknown coin surging a cool 6000% on coin market cap in a single day. This coin is known as Aurumcoin, and yes, it is absolutely a shitcoin.
This is a classic pump and dump tactic. Take a relatively unknown coin, with the vast majority of circulating tokens in the hands of a very small group, and get it listed on one or two exchanges. Then immediately pump up the price by trading a small amount of coins back and forth between predetermined buyers, and then attempt to dump coins on unsuspecting noobs who think they just discovered an opportunity to get rich quick on a little known gem.
You can spot these types of scams typically by the information surrounding the project, and its magnitude of rise in notoriety. No project, no matter how good, will go up that quickly if it is still relatively obscure and unknown. Now, perhaps in a perfect storm of public relations, and a really small float, it could potentially rise to those levels organically. But, Aurumcoin is neither a hidden gem nor a PR genius chess move, it is a black and white pump and dump scheme.
One important metric to always pay attention to when trying to ride pumps for gains, is the trading volume. If you noticed, even during the peak price movements of Aurumcoin (which it very quickly retraced by the way as the price action was not organic), trading volume for the coin remained relatively pathetic compared to its price increase. We are talking about anywhere inbetween 100-150k TOTAL daily volume. Take it from someone who has been trapped in large spread liquid assets before that on paper can look like 50% gainers in a single day, but with no bid support, your ability to get your money out at peak price levels is practically non-existent.
Hopefully, none of you got sucked into this pump and dump. Always be extremely careful and ere on the side of caution when getting into extremely unusual moves like this.
Pump and dump scams like Aurumcoin are a great example of why you should always invest/trade with a strategy that minimizes your exposure to emotion, and ideally one with long term goals already in place, so as not to make you susceptible to the subtle manipulation of greed and fear.
Existe un riesgo enorme al realizar trading ! es por eso que se debe uno de informar antes de realizar cualquier movimiento y no actuar por impulso o corazonada! :D