How To Avoid a Pump and Dump in the Crypto Markets

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A rush of new and inexperienced crypto-currency investors, hoping to get a piece of the next sensational success story, are at risk of buying into pump and dumps. While those that do their homework and research their investments carefully will certainly prosper, many investors new to the crypto and altcoin markets will lose a substantial sum of money to tips they get from sub-reddits and other chat rooms.

After identifying rookie investors, these "pumper" groups will reach out to them with inside information about a coin and that the price will soon start to rise. When the unsuspecting new investor sees this prediction coming true on the charts they buy in with all their assets hoping make 10 or 100 times their money. For a brief instance it looks like they are going to be rich beyond their wildest dreams as the price heads up in a near vertical line but...something is wrong. The price is falling. Before the rookie can react the price plummets below where they bought and bottoms out. In an instant they are transformed from a wide eyed and hopeful investor to nothing more than a bag-holder who roams around aimlessly encouraging people to invest their folly so that they can cash out of their nightmare. But no one will bite, the stink of desperation is too much.

The good news is that all of this pain can be avoided by following a few simple rules:

1) Never buy dead coins. I'm going to say that again in bold italics to emphasize its importance- Never buy dead coins. This should be obvious but everyday I see someone in a forum asking why the price has crashed on a coin where the last update from the dev is a suicide note from 2014. If the coin is dead you are getting pumped, it has no other use at that point. To spot dead coins just do your diligence and scope out the website and their chat channels. Get used to Slack and join Reddit if you haven't already. If you don't see developer activity or a bustling community, stay away.

2) NO MO' FOMO! Never buy a coin just because the price is rising. I know we've all gotten lucky and bought into a bull run without checking our feeds but you should never buy unless you understand why the price is spiking, how much of a spike it might be, and have an exit plan.

3) Never take "inside information" or tips from anyone online that you don't implicitly trust. And even if do trust them, verify independently anyway. You must scrutinize anything anyone tells you. First run some quick google searches and then scope the subs, slacks, forums and other chat rooms. If you can't confirm it from a trustworthy source, ignore it.

4) NEVER BUY DEAD COINS!

The world of crypto will remain fraught with the dangers of scams, hustles, hacks, hype, and worse for the foreseeable future but if you follow these rules you can at least dodge the pump & dumps. I've included links to some trusted resources as well as a list of active coins with supportive communities and working developers (but still do your own research) that are low priced with plenty of room to grow. This is just a beginners list and should not be considered complete by any means.

Living Coins:

PIVX
GNT (project golem)
ARK
BURST
ARDR
REP(Auger)
and, of course
STEEM

Markets & Exchanges

https://bittrex.com
https://poloniex.com

Research & Support Resources:

https://www.coingecko.com/en
https://www.reddit.com/r/CryptoCurrency/
https://coinmarketcap.com
GRODT.Club