Only insiders profited How Trump's cryptocurrency became a fiasco for retail investors
The first traders made hundreds of millions with the cryptocurrency "$TRUMP". However, small investors often lose out on memecoins like this one.
No time? blue News summarizes for you
- Early investors in the Trump memecoin made huge profits within a few days, while almost a million retail investors suffered losses of around two billion dollars.
- Around 100 million dollars in trading fees flowed to the Trump family and their associates, while Trump is simultaneously trying to loosen regulation of the crypto market in the US.
- Blockchain data suggests that some investors were aware of the Trump memecoin release before it was officially announced.
It all began with an announcement by Donald Trump on January 17, 2025, where the US president advertised the newly created memecoin called "$TRUMP" on his social media channels. Within minutes, an anonymous investor invested over one million US dollars in the new cryptocurrency. At the time, the entry price was just 18 cents per coin. The hype was not long in coming - the price reached a high of 75 dollars after just a few hours.
As with many so-called memecoins, which are often developed as a parody of popular cryptocurrencies such as Bitcoin, the market initially exploded. The example of Dogecoin last year showed how strongly such coins can be influenced by social media and viral trends. However, the appearance of quick profits often conceals a dangerous financial game known as "pump and dump".
Here, the value of a coin is artificially driven up by targeted marketing campaigns and hype in social media ("pump"). As soon as the price rises, insiders sell their holdings at a profit, leading to a massive price crash ("dump"). Investors who get in late are often left with worthless coins and suffer high losses.
Profits for the few, losses for the many
This is exactly what happened with Trump's memecoin. In total, the 31 first traders earned more than 669 million dollars. The price collapse was not long in coming: an investigation by Chainalysis for the New York Times shows that over 800,000 wallets holding $TRUMP tokens have collectively recorded losses of around two billion dollars.
For the Trump family, however, the memecoin was a lucrative business. Trading fees amounting to around 100 million dollars flowed to Trump's entourage and business partners. Although many of these funds have not yet been paid out, the transaction raises questions - especially as Trump is simultaneously trying to loosen regulation of the crypto market in the US. Critics accuse him of profiting from questionable cryptocurrencies and weakening consumer protection at the same time.
"The president is engaging in shady crypto deals that harm investors while watering down oversight of the financial market," Corey Frayer, a former advisor to the US Securities and Exchange Commission (SEC), told the New York Times.
Insider trading in focus
The processes surrounding the initial transactions are particularly suspicious. According to blockchain data, the Trump memecoin was created as early as 9:01 a.m. on January 17 - but the official announcement did not follow until twelve hours later. One of the largest transactions, a purchase of 1.1 million dollars, was carried out from a wallet that had been created just a few hours earlier. This fuels speculation about insider knowledge and dishonest dealings.
An alleged early investor, who claimed to be Syed Sameer, caused additional confusion with contradictory statements. When journalists uncovered discrepancies in his statements, he admitted that he had simply lied for attention. The true identity of the first major investors remains a mystery.
