Related papers: Pump, Dump, and then What? The Long-Term Impact of Cryptocurrency Pump-and-Dump Schemes

Pump, Dump, and then What? The Long-Term Impact of Cryptocurrency Pump-and-Dump Schemes

URL: http://arxiv.org/abs/2309.06608v1
Date: Tue, 12 Sep 2023 21:23:50 GMT
Title: Pump, Dump, and then What? The Long-Term Impact of Cryptocurrency Pump-and-Dump Schemes
Authors: Joshua Clough, Matthew Edwards,
Abstract summary: We study the long-term impact of pump and dump schemes on 765 coins. Despite a short-term positive impact in some cases, the long-term impact of pump and dump schemes on the targeted assets is negative, amounting to an average 30% relative drop in price a year after the pump event.
Score: 0.46040036610482665
License: http://arxiv.org/licenses/nonexclusive-distrib/1.0/
Abstract: The pump and dump scheme is a form of market manipulation attack in which coordinated actors drive up the price of an asset in order to sell at a higher price. Due in part to a lack of enforcement, these schemes are widespread within the cryptocurrency marketplace, but the negative impact of these events on the coins they target is not yet fully understood. Drawing upon a novel dataset of pump events extracted from Telegram channels, an order of magnitude larger than the nearest comparable dataset in the literature, we explore the differing tactics of pumping channels and the long-term impact of pump and dump schemes across 765 coins. We find that, despite a short-term positive impact in some cases, the long-term impact of pump and dump schemes on the targeted assets is negative, amounting to an average 30% relative drop in price a year after the pump event.

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