The price of $Trump has fallen to less than a quarter of its peak.

Author: Wu Yu, Jin Shi Data

At the beginning of this year, the cryptocurrency $Trump launched by Trump sparked a speculative frenzy in a short period. Early traders made hundreds of millions of dollars through quick buying and selling, while over 810,000 investors collectively lost more than $2 billion. This event not only exposed the high risks of the cryptocurrency market but also raised questions about the Trump family's use of their influence for profit.

Just after 9 PM Eastern Time on January 17, less than two minutes after Trump announced the launch of the cryptocurrency $Trump on social media, a crypto wallet identified by the code 6QSc2Cx purchased 5,971,750 $Trump at a price of $1.096 million, with an initial token price of only $0.18. Subsequently, the price of $Trump skyrocketed, reaching as high as $75.

Notably, blockchain records show that $Trump was created at 9:01 AM on January 17, but Trump announced this news 12 hours later. Furthermore, the account for the first large public transaction was created about three hours before the token was launched and was funded with virtual currency that evening, seemingly preparing to buy the new token.

These precisely timed trades raised suspicions among cryptocurrency analysts, who speculated that traders might have used insider information.

According to a report commissioned by The New York Times and prepared by blockchain analysis firm Chainalysis, the profits gained by early buyers and insiders were enormous: an estimated net gain of $6.6 billion! According to another analysis firm, Nansen, most early profit-takers were large buyers, with 31 of them earning $669 million in profits within a few days.

The Trump family is undoubtedly also a visible big winner. Data from Chainalysis shows that the Trump family and their partners earned nearly $100 million from transaction fees, although most of it has not yet been realized.

However, the profits of these early traders came at the expense of massive losses for many ordinary investors. As the price of $Trump plummeted, investors in over 810,000 cryptocurrency wallets collectively lost more than $2 billion, most of whom were retail investors. As of midweek, the price of $Trump hovered around $17, less than a quarter of its peak of $75.

"Pump-and-Dump" Scheme

Trump triggered this speculative frenzy three days before his inauguration, and this rapid cycle of boom and bust has raised widespread concerns about the speculative risks of so-called "memecoins." Memecoins are cryptocurrencies based on internet jokes or celebrity endorsements.

Several former state and federal financial regulators stated that this series of events was not surprising. The operational model of the memecoin industry is essentially like this: legal but largely unregulated. Trading relies on experienced traders buying in large amounts early to drive up prices, then selling their holdings after ordinary investors follow suit, leading to losses for the latter.

What particularly concerns government regulators and former officials is that while the Trump family profits from this exploitative model, Trump is rapidly pushing to end regulatory crackdowns on cryptocurrencies by multiple government agencies.

Corey Frayer, a former cryptocurrency advisor at the U.S. Securities and Exchange Commission (SEC), stated, "The president is involved in a cryptocurrency scheme that harms investors while appointing financial regulators that will weaken victim protections, which could protect him and his family from enforcement actions."

The losses brought by $Trump are very real for hundreds of thousands of investors, including some of Trump's loyal supporters. Shawn M. Whitson, a 40-year-old small computer repair shop owner from Walnut Cove, North Carolina, celebrated Trump's return to the White House before his inauguration, but by the end of January, he was disappointed with Trump, calling "this token a joke."

In the past six months, Trump and his son have been actively involved in the cryptocurrency industry multiple times. While promoting cryptocurrencies during his campaign, Trump also helped establish a company called World Liberty Financial, which offers a digital currency named $WLFI to wealthy investors with financial market experience.

Last week, Trump Media & Technology Group announced its entry into the financial services industry, launching a brand called TruthFi, which offers investment products linked to Bitcoin.

However, the launch of the $Trump memecoin is the Trump family's first direct attempt to market a new cryptocurrency token to ordinary investors. These products, which saw large early purchases followed by rapid sell-offs, have raised the alert of New York regulators, who described these operations as "pump-and-dump" schemes and warned that they could lead to significant losses for later investors.

There is currently no evidence that Trump or his associates artificially inflated the price of $Trump or engaged in insider trading.

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