Since its introduction in the middle of January, TRUMP, the official meme cryptocurrency associated with the U.S President, has plummeted by approximately 80%, dropping from $76 to $16.
An investigation conducted by the New York Times (NYT) in collaboration with Chainalysis, a blockchain analysis company, has unveiled that more than 810,000 investors have been affected by losses totaling over $2 billion.
A segment of the report emphasized that, during the initial 19 days of trading, a total of 813,294 wallets recorded losses. Those on the losing end, who purchased the token at a higher price than its current value, collectively suffered $2 billion in either realized or potential losses.
Early Investors and Insiders Raked in $6.6 Billion in Profits
In stark contrast, the NYT report disclosed that early investors and insiders managed to amass an astonishing $6.6 billion in profits.
According to the report, the profits secured by the early purchasers were astronomical, amounting to a total of $6.6 billion in profits that were cashed out.
As opposed to the +810,000 losers, Chainalysis highlighted that fewer than 700,000 traders actually profited from the TRUMP meme coin. Additionally, Nansen, another analytics firm referenced in the report, asserted that the majority of the initial winners were significant players.
The report indicated that the early trades turned out to be highly profitable; 31 of these major early traders garnered $669 million in profits within a short time frame.
Some of these major players were reportedly insiders who strategically positioned themselves due to timely actions. For instance, the first public account to place a substantial bet on TRUMP, involving a stake exceeding $1 million, was allegedly established three hours prior to the President’s announcement of the cryptocurrency on January 17.
Furthermore, the creation of the memecoin’s contract address took place 12 hours before the President’s announcement, allowing insiders ample opportunity to make strategic moves.
A noteworthy observation was that retail traders flocking to TRUMP engaged in more trades compared to whales. However, it was not surprising that whales managed to rake in higher profits than retail traders, a pattern that became evident just five days after the commencement of TRUMP trading.
In an analytical report released on January 23, Chainalysis highlighted that over 60 whales had generated profits exceeding $10 million.
It is essential to note that opinions on the TRUMP phenomenon were diverse, with some hailing it as a groundbreaking instance of wealth creation through blockchain. Conversely, the substantial losses associated with TRUMP received heavy criticism, with opponents labeling it as ‘exploitative,’ ‘extractive,’ and a ‘pump and dump’ scheme.
Corey Frayer, a former crypto advisor to the SEC, censured the President in his remarks to the NYT, accusing him of participating in dubious cryptocurrency schemes that harm investors, all while appointing financial regulators who could potentially weaken investor protections and shield himself and his family from legal repercussions.