4:39 pm - February 24, 2025
The Launch of the $Trump Cryptocurrency and the Initial Surge
The $Trump cryptocurrency made its debut on January 17, 2024, shortly after then-President-elect Donald Trump announced its creation on his social media platform. The token was launched with an initial price of just 18 cents per coin, but the market reaction was immediate and dramatic. Within minutes of Trump’s announcement, a crypto wallet identified by the address starting with "6QSc2Cx" purchased 5,971,750 tokens for $1,096,109. This early trade marked the beginning of a huge price surge that would eventually see the token’s value soar to $75 per coin. The wallet’s owner, whose identity remains unknown, sold their holdings over the next two days, earning a profit of as much as $109 million.
This pattern of early traders buying up large quantities of the token and then selling at a significant profit is a common theme in the cryptocurrency market, particularly with so-called "memecoins," which are often tied to celebrities or online trends. However, while these early investors reaped massive rewards, the rush of momentum was short-lived. By the middle of the week, the price of $Trump had dropped to around $17, leaving many later investors with significant losses.
The Profit bonanza for early traders
The $Trump token’s rapid price increase was fueled by a small group of sophisticated traders who were able to act quickly and capitalize on the initial hype. Blockchain analytics firms, including Chainalysis and Nansen, conducted a detailed examination of the trading activity and identified a pattern of early buyers who made enormous profits by selling their tokens as the price peaked. One of these traders, who purchased $1.1 million worth of tokens just minutes after Trump’s announcement, sold their holdings in a matter of hours, earning a profit of at least $50 million. Further sales by this trader and others brought the total profits to $109 million.
These early traders were not the only ones to benefit. According to the analysis, 31 large early traders collectively made $669 million in profits within days of the token’s launch. This group of investors, many of whom appeared to be based in China, were able to exploit the speculative fervor surrounding the token, selling their holdings before the price collapsed. However, their gains came at the expense of a much larger group of investors who entered the market later and were left with significant losses.
The Devastating losses for late investors
While the early traders enjoyed enormous profits, the vast majority of investors who bought $Trump tokens were not as fortunate. By the middle of the week, more than 810,000 wallets had lost money on the investment, with cumulative losses exceeding $2 billion. Many of these investors were everyday people, including some who were enthusiastic supporters of Trump, drawn in by the promise of quick profits. Shawn M. Whitson, a 40-year-old small business owner from North Carolina, was one of these investors. He had celebrated Trump’s return to the White House and initially hoped that the token would rise in value. However, by the end of January, he was expressing frustration, calling the token “a joke” and walking away from his investment.
The heavy losses suffered by these investors highlight the risks inherent in the speculative cryptocurrency market, particularly when it comes to memecoins. These tokens, often tied to celebrities or online trends, are highly volatile and prone to sharp price swings. In the case of $Trump, the price crashed just days after reaching its peak of $75, leaving many investors with significant financial losses.
The Trump Family’s Role in the Crypto Venture
The launch of the $Trump token was the first time the Trump family had directly marketed a cryptocurrency to ordinary investors. The token was heavily promoted by Trump himself on his social media platform, Truth Social, as well as on Elon Musk’s X platform. Trump encouraged his followers to “Join my very special Trump Community” and to “GET YOUR $TRUMP NOW.” The marketing effort appears to have been highly effective, generating nearly $100 million in trading fees for the Trump family and its partners. While most of these fees have not yet been cashed out, they represent a significant windfall for the family.
The Trump family’s foray into the cryptocurrency market is part of a broader effort to capitalize on the sector’s growth. In recent months, Trump and his sons have made several aggressive moves into the crypto industry, including the creation of a company called World Liberty Financial, which offers a digital currency called $WLFI to wealthy investors. More recently, Trump Media & Technology Group, the parent company of Truth Social, announced plans to launch a financial services brand called TruthFi, which will offer investment products tied to Bitcoin.
The Regulatory concerns and broader implications
The $Trump token’s rapid rise and fall has raised significant concerns among government watchdogs and financial regulators. The token’s launch appears to have followed a classic “pump-and-dump” scheme, in which early investors artificially inflate the price of an asset before selling their holdings at the peak, leaving later investors with significant losses. While no evidence has emerged that Trump or his associates engaged in insider trading or artificially inflated the token’s price, the pattern of early traders making enormous profits at the expense of later investors has drawn criticism from former regulators.
Corey Frayer, a former crypto adviser to the Securities and Exchange Commission, has accused Trump of profiting from an exploitative pattern while simultaneously working to roll back regulatory protections for investors. Frayer alleges that Trump is appointing financial regulators who will insulate him and his family from enforcement, even as he participates in crypto schemes that harm investors. Similar concerns have been raised by state regulators in New York, who have warned consumers about the risks of memecoins and the potential for “pump-and-dump” schemes.
The Broader Context and lessons learned
The story of the $Trump token is just one example of the broader speculative dangers inherent in the memecoin phenomenon. These tokens, often tied to celebrities or online trends, are highly volatile and prone to sharp price swings. While they can generate enormous profits for early investors, they often leave later investors with significant losses. The launch of $Trump also highlights the ways in which influential figures can exploit their platforms to promote risky investments, often with little regard for the potential consequences for their followers.
The cryptocurrency market’s lack of regulation and transparency makes it particularly vulnerable to abuse. While blockchain technology provides a public record of all transactions, the identities of the individuals behind these trades are often hidden, making it difficult to hold anyone accountable for exploitative practices. The $Trump token’s launch serves as a stark reminder of the risks of speculative investing and the need for greater oversight in the cryptocurrency market.
In the end, the $Trump token’s meteoric rise and fall serves as a cautionary tale for investors. While the promise of quick profits can be tempting, the reality is that the cryptocurrency market remains a high-risk, high-reward environment where only a select few are likely to come out ahead.