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Another year, another XRP pump&dump

Photo of: Joseph Stone
by Joseph Stone

Coordinated action inspired by the WallStreetBets movement caused the price of XRP to jump 150% to $0.75. But very quickly, the value of the Ripple token fell by more than 40%.

The expression of a rejection of the practices of Wall Street investors led to a battle over the title of the company GameStop. The success of the operation, hampered by Robinhood, seems to inspire other Internet users.

For example, over the past weekend, the value of Ripple’s XRP literally skyrocketed. The price of the XRP was rising to over $0.75. However, given the SEC’s complaint against the firm, the token was characterized by gloom.

This outbreak of XRP appears to be the result of a coordinated effort, with the main participants belonging to one or more Telegram groups. One group had a membership of 200,000. Their common goal: to buy and keep the token to boost its price.

This practice has a name, a “pump”. And so this action met with some success, at least temporarily. According to its organization on Telegram, this operation was to take place on February 1st.

But the rise in XRP started in fact in the days preceding this date. “February 1st will be an incredible date! It’s a global initiative, and it’s interesting to see what people can do as a community,” said The XRP Bully.

The principle was to keep the crypto-active to prevent its sudden fall. This one was nevertheless successful. The XRP, after rising to $0.75, plunged on February 1st by 40% to return to $0.42. The XRP was still in the black.

On February 2, Ripple’s token was down nearly 45% to $0.36. For buyers who want to boost its price, it is therefore highly likely that this transaction will result in losses.

In the end, what was presented as an XRP “pump” resulted in a “pump & dump”. In other words, after a sharp rise, assets fall sharply. However, these 3 days of high volatility may not only have losers.

According to CoinDesk, the exact reason for the dumping remains to be clarified. For our colleagues, a whale (a major investor) could have taken advantage of this windfall to sell its XRP. Remember that these pump & dump strategies are not new to crypto. And buying during such campaigns presents strong risks