More than 800,000 investors "stand guard on the mountaintop", leaving a mess after the issuance of Trumpcoin

Since its launch in mid-January, the price of TrumpCoin, the official meme coin of US President Trump, has fallen from a high of $76 to around $17, a drop of nearly 80%.

This rapid decline meant that many investors were forced to lock in their holdings. According to a report compiled by blockchain analysis company Chainalysis and The New York Times, the decline of Trumpcoin caused a total of 810,000 investors to lose money, with a total loss of more than $2 billion.

Unlike these investors who lost money, early traders and insiders of Trumpcoin are estimated to have made a net profit of $6.6 billion. Chainalysis added that approximately less than 700,000 traders profited from Trumpcoin trading.

Another analysis company, Nansen, pointed out that most of the early winners of Trumpcoin were large buyers, 31 of whom made $669 million in a few days. In contrast, most of the late losers were retail investors.

Cutting leeks

After digging into the material, it was discovered that most of the early buyers of Trumpcoin were insiders. The first account to publicly bet on Trumpcoin was created three hours before Trump announced the issuance of memecoin, and the amount of bets was as high as more than $1 million.

In the first few minutes of trading, a crypto wallet with the identification code 6QSc2Cx received a large batch of new tokens at an opening price of 18 cents per coin, totaling 5,971,750. The price of this batch of memecoins then soared, and soon reached $75 per coin.

In addition, TrumpCoin was created 12 hours before Trump’s announcement, which also provided insiders with ample preparation time.

In addition to these early large investors, the Trump family is the biggest beneficiary. According to Chainalysis data, nearly $100 million in transaction fees flowed to the Trump family and its partners, but most of the proceeds have not yet been realized.

For some regulators and analysts who are cautious about memecoins, the huge volatility of Trumpcoin is undoubtedly very worrying.

Corey Frayer, a former cryptocurrency adviser to the U.S. Securities and Exchange Commission, said Trump is engaging in a cryptocurrency scheme that harms investors; at the same time, the financial regulators he appoints will revoke protections for victims and could shield him and his family from regulatory fallout.