Disposable tokens

The cold reality of crypto pumps

TL;DR: It’s cheaper to mint new tokens instead of accumulating existing ones. During altseason, the pump operators promote new tokens, leaving old tokens in the hands of unfortunate traders.

Pump happens when high demand meets low supply.

Pump operator can reduce the circulating supply by accumulating the tokens on the exchange. The cost of supply becomes an expense on the operator’s balance sheet. However, why should the operator pay that cost if he can simply mint a new token… for free?

A new token’s supply is fully controlled by operator. When he sells the supply during the pump, he doesn’t need to share the profits with traders who also bought while he was accumulating. Therefore, operator enjoys higher profit margin while spending the same money on promotion.

Most tokens are created for pumps. You can trade them to make money. But don’t expect a macro uptrend: it’s the prerogative of select few assets which are genuinely changing the world.

Follow https://twitter.com/MarkPriceSource for advice on preserving your capital in crypto. Also, here’s a song for you: