 What drives cryptocurrency pump and dump schemes: Coin versus market factors?Lanouar Charfeddine and Ahmed Mahrous Finance Research Letters, 2024, vol. 67, issue PB Abstract: This paper investigates both coin-specific and market-based factors that drive cryptocurrency pump-and-dump schemes. It analyzes a data set comprising 1457 pump events that occurred from January 3, 2018, to January 2, 2022. Empirical findings, derived from binary cross-sectional regression models, reveal several characteristics that increase the likelihood of cryptocurrencies being pumped. These include lower market capitalization, lower trading volume, greater social media popularity, increased developer activity, and fewer exchanges trading them. Furthermore, the study employs count time-series models to examine market-based factors. The results indicate that periods of higher volatility or uncertainty are associated with an increase in pre-announced pump-and-dump activities. Additionally, the analysis shows that macroeconomic factors and specific time-related effects Рsuch as Sundays, certain months, and the COVID-19 period Рare significant in explaining the frequency of pump occurrences. Based on these findings, the article discusses several targeted recommendations. Keywords: Market manipulation; Cryptocurrency; Pump-and-dump; Coin factors; Market factors; COVID-19 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:67:y:2024:i:pb:s1544612324008912 DOI: 10.1016/j.frl.2024.105861 Access Statistics for this article Finance Research Letters is currently edited by R. Gen̤ay More articles in Finance Research Letters from Elsevier |
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