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On January 18, 2025, Trump posted on his social account that he would launchPersonal Meme Coin TRUMP.According to GMGN data, after the issuance of TRUMP coins, its market value once exceeded US$30 billion. However, after hitting a high of more than 41,200%, it began to fall rapidly.According to CoinGlass data, as of January 21, TRUMP coins fell 18.57% in 24 hours, with a total liquidation of more than US$50 million.Many people are curious:What is the hype logic of TRUMP coins soaring and plummeting?Does it have anything to do with the sharp drop in mainstream currencies such as Bitcoin?Is it possible for TRUMP to repeat the previous ending of “using celebrity effect to hype cryptocurrencies”?
recently, Liu Leilu, director of the “Digital Economy Legal Affairs Department” and senior equity partner of Beijing Yingke (Shanghai) Law FirmThe teacher accepted an interview with “Daily Economic News”, “Trump’s “issuance of coins” triggered a huge shock in the cryptocurrency market!Behind Wall Street Capital’s “carnival” over the weekend, who is “paying for” the hype?》, express professional insights on issues related to TRUMP currency.This article will further demonstrate the relevant issues based on the sharp rise and fall after the issuance of TRUMP coins.
oneWhat is the hype logic of TRUMP coins?
The logic of hype for TRUMP coins is actually very simple, just rely on“Celebrity Effect + Speculative Psychology”To push up prices.
first,Trump, whether you like or hate him, must admit that he is the “global top star”.Even if he simply opens his phone and posts on Twitter, it can attract the attention of hundreds of millions of people.The launch of TRUMP coins this time is to take advantage of Trump’s influence, which attracted the attention of investors and the media at once, creating a hype craze in the market.This popularity spreads rapidly through social media, making more and more people feel that this is an “opportunity to make a fortune.”
Second,The cryptocurrency market itself is crazy, with incredibly volatile prices.Many investors come to their dream of “get rich overnight”. The surge in the price of TRUMP coins this time is a reflection of this speculative psychology.Many people saw the price of TRUMP coins soaring, and then poured into it, further pushing up the price of the coins.Especially in the early stages of the project launch, market sentiment is more susceptible to impact.This short-term speculation will also intensify the intensity of hype.This speculative mentality is like a prairie fire, and it is out of control.
in addition,PlusSocial media boosts, Twitter (X), Reddit and other social platforms are full of discussions about TRUMP coins, and everyone has made this craze even more popular.This community effect can be said to be very common in the currency circle. Under the spread and discussion among investors, these projects have quickly gained widespread attention.
However, the problem is:TRUMP coin itself actually has nothing, no actual technical support, and no real application scenarios. It is like a castle in the air, all supported by market sentiment.According to the views of official Wall Street financial institutions, crypto digital asset tokens issued relying on the “celebrity effect” often experience a “flash-and-short-turn” surge in the early stage of issuance, and will face a long pullback after that, and the bottom-buying behavior will instead cause aIt is placed at the “risk of loss”.Once the popularity passes, or the market sentiment changes, the price will collapse instantly like a deflated ball.Although this hype logic can make people see crazy increases in a short period of time, in the long run, there are great risks.
twoTRUMP coin issuance, and Bitcoin fell sharply
What’s the matter?
Liu Lu believes thatThe sharp drop in mainstream cryptocurrencies such as Bitcoin is definitely related to the speculation of TRUMP coins!
first,Their connection is reflected in the capital side. A large amount of speculative funds are withdrawn from the mainstream digital asset market and instead pursue the short-term huge profits of TRUMP coins. This drastic change in capital flow will inevitably lead to market fluctuations.The cryptocurrency market is like a big pool, and the total amount of investors’ funds is limited.After the issuance of TRUMP coins, the entire crypto digital asset market suddenly became in full swing, and the market became more convinced that Trump would relax the regulation of the crypto asset industry, which also drove the influx of a large number of crypto digital asset investments.At the same time, funds from mainstream coins such as Bitcoin were “sucked away”.
Second,The transmission of market sentiment is also very important.TRUMP coin has risen too hard. Investors were excited at first, but when they were excited, they began to worry: “TRUMP coin will not collapse soon, right?” This panic will soon spread to mainstream coins such as Bitcoin.superior.When everyone was afraid, they quickly sold it, and the price naturally plummeted.This economic “suppressive effect” will cause the currency price of the entire market to fluctuate simultaneously.
in addition,Since the market foundation of TRUMP itself is not solid, its price fluctuations are mainly driven by short-term market speculation. Therefore, once the market sentiment becomes worse, investors’ risk preferences will decrease, even if there is no direct relationship with it.When the market falls overall, investors will definitely sell high-risk currencies first.This is human nature.
Overall,The high degree of linkage in the cryptocurrency market and the emotional resonance of investors often influence the overall market volatility.Therefore, there is indeed a correlation between the sharp drop in mainstream cryptocurrencies such as TRUMP coins and Bitcoin, but this relationship is more of a resonance of market sentiment and real-time dynamics, and is not a closer technical relationship at another level.At the same time, investors should also understand thatThe main factors that really affect cryptocurrency prices are actually still market sentiment, regulatory policies and overall economic environment.
threeThe TRUMP currency issuer retains 80% of its share
Risk: Is it a leek?
TRUMP coin issuers retain 80% of their share!This distribution method is like leaving most of the cake to yourself and giving investors a little cake residue.Of course, many investors quit doing it, feeling that they are regarded as “leeks”.
(I) The hidden danger of the issuer retaining a large share
First,This issuance distribution model of the issuer that retains a large share of its own does hide great risks.The project party has so many tokens in his hand and can sell them in the market at any time.If they see the right time and throw out 80% of the tokens in their hands, the market will collapse instantly.The funds invested by investors entering the market later may disappear overnight, and this risk is not a joke.Second,There are also big problems with the transparency of the TRUMP coin project.After all, the project party has not explained anything clearly, how to develop in the future, how to allocate tokens, and how to use funds.This uncertainty has made investors feel excited and increased the risk of investment.Third,This issuer’s own share model is not the “first creation” of TRUMP coins in the currency circle. The capital structures of many similar “air coin” projects before showed this typical “prophet model”, and there are lessons from the past:The project party uses the celebrity effect to attract investors, and then cashes out at a high level and runs away.Will TRUMP coins repeat the same mistakes?There is a question mark here.As an investor, you should fully weigh risks and returns to avoid blindly following the trend.Invest rationally and wait and see carefully is the wiser choice.
(II) Learning from the hype of “celebrity effect”
Using the “celebrity effect” to hype cryptocurrencies is no longer new.In the past, those “star coins” and “Internet celebrity coins” had similar routines.They usually have the following characteristics:
1. Short-term surge: The “celebrity effect” is like a fire that can instantly ignite the price of the coin.But this kind of fire comes and goes quickly.Once the heat fades, the price will plummet instantly like a roller coaster;
2. Lack of actual value: Most of these coins have no practical use, neither technological innovation nor application scenarios.They exist for hype;
3. Emotion-driven investment: Most investors are attracted by the celebrity effect and have no time to study the project itself.When everyone sees others buying, they also buy it themselves, and they are completely blindly following the trend;
4. Insufficient transparency: The project party always hides it, and the key information is not disclosed.Some projects may have problems such as unclear fund use plans and unfair token allocation, and may even have legal risks, triggering regulatory scrutiny.
so,TRUMP coins are indeed experiencing a hype climax caused by the “celebrity effect” in the short term, but TRUMP coins are essentially a Meme coins that lack actual value support, and their price fluctuations are completely dependent on market sentiment and speculative behavior.As for whether TRUMP coins may repeat the previous issue of “using celebrity effects to speculate on cryptocurrencies”, we should still look at them in a comprehensive manner based on the actual market conditions and other factors in the future.If TRUMP coins have always lacked actual project foundation and application scenarios, they are likely to face the risk of plunge and bubble bursting in the future.
FourThe lawyer has something to say
The issuance of TRUMP coins has indeed set off a “hype craze” around the world, but you should know thatThe supervision of Lighthouse Country is not a joke here.Their SEC, CFTC, OFAC and other institutions have long set up many lines of defense for virtual currencies. If virtual currencies are recognized as “securities” in the future, they are illegal if they are not registered; if they involve anti-money laundering investigations, they will violate the red line.In addition, each state also has its own regulatory laws and may take action at any time.In the future, as more national institutions enter the market, the market structure is likely to change.
