Author: Wu Yu, Golden Ten Data

At the beginning of this year, the cryptocurrency $Trump launched by Trump quickly sparked a speculative frenzy. Early traders made billions of dollars in profits through rapid buying and selling, while more than 810,000 investors collectively lost over $2 billion. This event not only exposed the high-risk nature of the cryptocurrency market, but also raised questions about the Trump family's use of its influence to 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 cryptocurrency wallet with the identification code 6QSc2Cx purchased 5.97175 million $Trump tokens for $1.096 million, with an initial price of only $0.18 per token. Subsequently, the price of $Trump soared, reaching as high as $75.

It is worth noting that blockchain records show that $Trump was created at 9:01 am on January 17, but Trump announced the news 12 hours later. And the account that made the first large public transaction was created about three hours before the token was launched and deposited virtual currency that same evening, seemingly ready to snap up the new token.

These precisely timed transactions have raised the suspicions of cryptocurrency analysts, who suspect the traders may have used insider information.

According to a report commissioned by The New York Times and written by the blockchain analysis firm Chainalysis, the profits of early buyers and insiders were massive: an estimated $6.6 billion in net gains! According to another analysis firm, Nansen, most of the early profiteers were large buyers, with 31 people making $669 million in profits within a few days.

The Trump family is undoubtedly also a major winner. Chainalysis data shows that the Trump family and its partners have received nearly $100 million in transaction fees, although most of it has not yet been cashed out.

However, the gains of these early traders who profited quickly came at the expense of massive losses for ordinary investors. With the collapse of the $Trump price, over 810,000 cryptocurrency wallet investors have collectively lost over $2 billion, most of them retail investors. As of mid-week, the $Trump price is hovering around $17, less than a quarter of its peak value of $75.

"Pump and Dump" Scheme

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

Several former state and federal financial regulators have stated that this series of events is not surprising. The operating model of the memecoin industry is essentially this: legal but largely unregulated. Transactions rely on experienced traders heavily buying in early to drive up prices, then selling their holdings when ordinary investors jump on the bandwagon, causing the latter to suffer losses.

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

Corey Frayer, former SEC cryptocurrency advisor, said: "The president is engaging in cryptocurrency schemes that harm investors, while appointing financial regulators who will likely weaken protections for victims, who may shield him and his family from enforcement actions."

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

Over the past six months, Trump and his sons have actively involved themselves in the cryptocurrency industry. While promoting cryptocurrencies during his campaign, Trump also helped establish a company called World Liberty Financial, offering a digital currency called $WLFI to wealthy investors with financial market experience.

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

However, the launch of the $Trump memecoin was the Trump family's first direct attempt to sell a new cryptocurrency token to ordinary investors. These early large-volume purchases followed by rapid sell-offs have raised the alarm of New York regulators, who have described the operations as a "pump-and-dump" scheme and warned that they could result in huge losses for late-stage investors.

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