Wealth reorganization in 48 hours: the wealth and losses behind Trumpcoin

Original article: Zhu Likun, Qiu Hao, Guan Yiwen, LatePost

Editor: Guan Yiwen

Two days before taking office as the US President, Trump's team seized the last window to promote the product and released the Meme coin $TRUMP. This cryptocurrency has no function and only reflects the most basic logic of the trading market - if there are more people who want to buy than those who want to sell, the price will rise; otherwise, it will fall.

This is the culmination of a series of Trump's product promotions. During the election, he sold "Fight Fight Fight" perfume for $199, "Never Surrender" sneakers for $399, and Trump watches that cost up to $100,000, so that ordinary people and wealthy fans can buy them.

“Fight Fight Fight” is the slogan launched by Trump after the assassination attempt, and this time it also appears on the official logo of $TRUMP.

The bubble was created in an instant and quickly dissipated. The price of $TRUMP rose from less than $1 to a maximum of more than $75 a day and a half after its issuance. Based on a total issuance of 1 billion, its fully diluted valuation (FDV) reached $75 billion, which once exceeded the Dogecoin promoted by Musk. It took only a day and a half for $TRUMP to plummet from its peak price to less than half.

A few people who participated early made a lot of money, while more people who followed the trend lost money, and their life paths diverged. Of course, the most direct beneficiary was the Trump team that issued the coin. Coinbase executive Conor Grogan said that even without selling any tokens, the Trump team earned about $58 million in transaction fees in one day.

This confirms a simple fact: in a purely speculative market, the only way to make money is to "run a casino." This article attempts to record the experiences of the participants in this absurd transaction 48 hours after the Trump Coin was issued.

Bet $600,000 before Trump tweets

"Moonshot! Moonshot!" At 9 p.m. EST on January 17, 0xSun's headset suddenly erupted with shouts, and several cryptocurrency players shouted excitedly in the group. Moonshot is a platform that allows the use of legal currency to trade meme coins.

0xSun is in a small group with these people. They are used to chatting with each other for six or seven hours a day. They buy and sell coins in front of the computer and share their operation ideas. It looks like a few friends playing games together. The game is very thrilling. They may make millions of dollars in a few hours, or lose everything.

The person who shouted "Moonshot" also forwarded a link to the group at the same time. It was Trump's announcement of the launch of $TRUMP on his own media platform Truth. At this time, it was only two days before he officially took office as the US President.

"This may be the biggest opportunity I have ever had since I joined the cryptocurrency world." 0xSun thought. But this unexpected event seemed a bit absurd. How could a president release a worthless token? It seemed more like a hacker's account theft, which is also very common in the cryptocurrency world.

"Celebrate our victory and have fun!" $TRUMP's official website wrote. The website repeatedly emphasized that this coin does not represent any investment opportunity and has nothing to do with politics.

This is the appearance of a classic meme coin. At the beginning, it had no real value and no so-called fundamentals. It was often jokingly called a "virtual coin". A popular online joke or an emoticon can become a meme coin. Its value depends only on how many people are willing to believe that it has value and are willing to spend money to buy it. Therefore, it has become the preferred tool for various scams.

Unsure whether he should buy, 3 minutes after $TRUMP was released, 0xSun’s monitoring system on the blockchain sounded an alarm. A new message reminded him that the racing game measured in seconds had begun - a blockchain address he had been monitoring for a long time had already started buying.

The address consisting of a long string of characters is called "smart money" in the crypto circle, referring to accounts with good past trading returns. 0xSun remembers that this trader is less than 20 years old and has made a lot of money. He does not pursue winning rate, but only seeks to buy in new projects early to gain low-cost advantages.

Another 10 minutes later, the various cryptocurrency communities where 0xSun was located began to discuss $TRUMP, and most people were questioning how ridiculous this coin was.

At this time, 0xSun had already started buying $20,000 of $TRUMP every minute, earlier than most people and at a very low cost. Because he found on his monitoring system that the Moonshot platform officially listed $TRUMP in just a few minutes, and the platform had not yet issued an announcement. Moonshot was relatively compliant, which made him more convinced that the official had already agreed to cooperate, rather than hacking. Many traders quickly judged to buy based on this point.

0xSun stared at the three computer screens in front of him. He opened two trading pages and repeatedly clicked refresh. The trading platform began to freeze and crash. Not every transaction was successful. He was a little nervous. He bought $600,000 in about half an hour, with an average cost of $0.6. It was the extremely low cost that made him make a fortune a few hours later. 0xSun also became the first person in the currency circle to make a lot of money in $TRUMP.

“Great traders all have their own intelligence systems,” said a trader codenamed doso.eth. “If this system is well done, it’s like having a third eye.”

0xSun is an on-chain player, and individuals trade directly on the blockchain. Compared with operating on exchanges such as Binance, this method has "unlimited freedom and unlimited risks". Therefore, on-chain players should make good use of data analysis tools, collect intelligence, and keep track of important dynamics related to transactions - it is a mental and physical job.

A celebrity, a dog head, or a sad frog, it makes no difference to the first buyer

"We have encountered too many projects that are suspected of being hacked. Analyzing data and collecting intelligence is our muscle memory." Another on-chain player , Moon , said that she has made a profit of more than $1 million from $TRUMP.

99% of the tens of thousands of new memecoins released every day lose their value. Some memecoins are scams from the beginning, and the project owners suddenly run away after attracting huge amounts of funds. The crypto community calls this scam a "rug pull," which literally means "pulling the rug," a vivid description of how unexpected this scam is.

Moon has only been in the industry for two and a half years, and has already adapted to this rapidly changing market. She usually studies projects and makes decisions quickly within five or six minutes. If she makes a mistake in judgment, she simply reflects on the problem and does not waste time on getting emotional. "While you are struggling and giving yourself psychological massage, you may have missed the next opportunity," she said in a flat tone.

Bond, who has been in the industry for 7 years, is not afraid of scams. Like 0xSun, he chose to "go all in" when most people were skeptical about $TRUMP. Also because he bought early, he earned a 20-fold return with a cost of $1 million.

Bond experienced a scam. The scammer first filled the fund pool with 100 million US dollars and hyped it up. The market value soared within three days of the coin issuance. When all the participants were jubilant, the pool was suddenly withdrawn.

“If you run fast, you can make money.” Bond thought that even if $TRUMP was also such a big scam, he believed that he could get out earlier than others based on his experience and run away before the scammers.

At 21:44, Trump’s Twitter account sent out the news of $TRUMP. At this time, 0xSun had already completed the buying operation and held one thousandth of the total amount of $TRUMP.

The transaction data on the chain is open and transparent. Moon checked the profitability of the on-chain wallets and found that "more than 400 addresses have made profits of more than 1 million US dollars, and I know more than 100 of them." She believes that most of these people are "ordinary people" who have no so-called connections or insider information and rely purely on technical analysis to obtain information.

In the hour when 0xSun's value skyrocketed, celebrities in the cryptocurrency circle were wearing black suits and bow ties and holding a ball in an auditorium a few blocks away from the White House. The $2,500 tickets sold out quickly, and some people paid $100,000 for VIP seats in order to meet the incoming White House artificial intelligence and cryptocurrency chief.

"The reign of terror against cryptocurrency is over." The incoming head explicitly opposed the Biden administration's strong regulation. "Innovation in cryptocurrency in the United States has just begun."

The ball was held to celebrate Trump's upcoming inauguration, and attendees expected the most cryptocurrency-friendly US president to introduce policies that would benefit the industry, but Trump did not appear at the ball.

Halfway through the dance, news of the $TRUMP sale came, and many people present had just learned about it. When the rapper at the dance sang "Don't Stop Believin'", more and more people around the world began to believe that $TRUMP was real, and a large amount of funds poured in, rapidly pushing up the market value of this meme coin and the value of 0xSun.

In the eyes of 0xSun, this name is just an influential symbol and a hot meme, no different from the emoticons representing other meme coins (such as dog head and sad frog).

From the pursuit of usefulness to complete speculation, "I can't make this much money even if I have a hundred chances"

At 21:30, Christine stared at 0xSun's on-chain wallet and saw that he was buying every minute, a total of $600,000. Christine only invested $10,000 or $20,000 to test the waters, and she felt that "there was no time and cost advantage anymore."

Half an hour later, 0xSun was already enjoying huge returns from his large investment. He kept refreshing the tool page for calculating returns. At the fastest time, his asset figures increased by 1 million US dollars every few minutes.

"The profit figures on paper are already too big." 0xSun said that when the price rose to $4, he sold it first to ensure that he could get back his principal. People who make the most money on $TRUMP usually have similar portraits: staring at the monitoring system and reading information all day, and living the screen as a part of the body; dare to gamble, but have clear trading discipline.

Christine is not one of them. She works very hard, putting her computer next to her pillow every day, and the first thing she does when she wakes up is to turn on the screen in bed to check the market. On the day $TRUMP was released, she had to accept the fact that she only slept half an hour longer, and the cost of buying $TRUMP was 6 times higher than 0xSun.

Five or six hours after the sale, the price of $TRUMP rose all the way to $14 and temporarily stabilized. "For a virtual coin with nothing, I feel that its price can't go up," said Christine. In the lobby of the Ritz-Carlton Hotel in West Kowloon, Hong Kong, she took out her computer during her work break and operated the sale.

Three hours later, she was surprised to see that the price line rose sharply by 90 degrees. The price did not fall, but continued to soar to $23. A large amount of funds poured in quickly, and the "whales" entered the market. Christine bought again, and sold it hastily when it rose to $25.

Christine is not the only one who does this. Many people in the crypto community do the same, waiting and watching, and making tentative purchases.

Some of them specialize in NFTs, turning artworks into virtual collectibles that can be bought and sold; some engage in decentralized finance (DeFi), lending money on the chain and earning interest; some engage in trading contracts, relying on predicting the price trend of a certain currency and leveraging to gain high returns.

"We are all speculative trading, there is no high or low, but memecoin is speculation among speculations." A trader said self-deprecatingly. Due to its extreme volatility, hype, and frequent scams, memecoin has been marginalized in the currency circle in the past.

In the past two years, meme coins have gradually entered the mainstream of the cryptocurrency circle. According to the statistics of the cryptocurrency data statistics platform CoinGecko, meme coins attracted the attention of 31% of cryptocurrency investors last year. One out of every three people is more interested in "air coins" with cat, dog, frog and monkey patterns, rather than valuable coins with technological innovation.

On the third day after $TRUMP was issued and the day after his inauguration, the 47th President of the United States was completely clueless when asked by reporters: “I launched it, it was successful, and other than that I don’t know much about it.”

His ambiguous attitude has caused dissatisfaction among many industry insiders. Danny Scott, CEO of cryptocurrency exchange CoinCorner, said that Trump is mocking the entire industry with a hype.

Last year, at the Bitcoin 2024 conference hosted by Bitcoin Magazine, a veteran media in the cryptocurrency industry, Trump took the stage to deliver a speech, announcing a series of crypto-friendly policy plans, including strategic reserves of Bitcoin, making the United States the world's crypto center and a Bitcoin superpower.

Before any promises were fulfilled, the interests had already been exchanged. The founder of a blockchain information platform found it hard to understand that members of Congress had to declare and be ridiculed by the world for buying and selling tens of thousands of dollars of stocks, but the incoming president was engaged in cryptocurrency without any supervision and directly used the cryptocurrency circle as an ATM.

A large proportion of early cryptocurrency participants were geeks who believed in decentralization. Later, as Bitcoin generated huge value, financial investment or speculation became mainstream. In recent years, with the supervision of governments, large financial institutions and more participation from the general public, compliance has gradually become the mainstream narrative.

The founder of the aforementioned information platform believes that the Trump team's issuance of coins is a collapse of compliance in the traditional sense. Even the president issued worthless meme coins without restraint two days before taking office, which means that anyone can do it.

"The industry is ushering in a super cycle of meme coins," said a trader with the code name doso.eth. The wealth-creating effect of meme coins is getting stronger and stronger. For example, in March 2024, a KOL who specialized in drawing sad frog memes issued a coin, which reached a market value of more than $1 billion in two or three days, and many early participants received a hundredfold return.

The cryptocurrency world is changing its gameplay, and many veterans have not followed the meme coin craze because they disdain, don’t understand, or don’t believe it.

Trader Daftpunk did not make a profit on $TRUMP because his main position was not placed on the Solana chain that hosted $TRUMP. Transferring assets from other places is much slower than players on the Solana chain. Daftpunk entered the industry at the peak of the Bitcoin craze in 2017. He believed that he had a decentralized ideal, but he did not agree with or like the more centralized development and governance of blockchain platforms such as Solana, but in the end he followed the trend and bought it.

A trader known as "Queen" in the cryptocurrency circle still bought $6 million when $TRUMP rose to $8.5. Two days later, she added a line to her social media profile: "Turned $6m to $32m in 2 days. RETIRED :)"

An old player who bought in at $1.4 has his own set of money-making experience. Memecoin has no fundamentals, and its core abilities are two: entering enough core circles and mastering the most first-hand information; preparing funds, keeping an eye on the market at all times, and figuring out a set of your own trading principles.

Christine said: "I can't make this much money even if I have a hundred chances." She has a steady investment style and is unwilling to be a full-time "dog" (speculating on meme coins). She thinks this kind of money is only suitable for people in their 20s. She is in her 30s and can no longer bear watching the market day and night. "When you are old, you are more likely to die suddenly."

At 5 a.m. on the 18th, 0xSun made his last selling operation, and the $600,000 principal turned into more than $20 million in profits.

He felt it was unreal. In the three years since he entered the industry, he would wake up every one or two hours of sleep, and check the market and news before opening his eyes, for fear of missing any opportunity. When he went out to travel, he would also put a 27-inch monitor in his suitcase. Now, he plans to take a break for a while.

Starting from the 18th, well-known exchanges such as Binance have successively launched $TRUMP. A large number of retail investors who do not trade directly on the chain rushed to buy it, driving the price from US$40 to US$70.

At that time, Christine had just finished a few hours of flight. She turned on her phone, and a series of new messages seemed to squeeze out of the screen. Many retail investors outside the circle who had never dealt with her before - car sellers, house sellers, insurance sellers, beauty salons, and KTV reservations, all came to ask her: Can you help me buy $TRUMP?

At the same time, she turned on the blockchain monitoring system and saw that the “smart money” in the circle was selling. “This time it has really reached the top.”

An investor observed that a big change in 2024 is that the entire cryptocurrency circle no longer talks about ideals. Everyone has entered a state of "web3 nihilism", and it has become a clear sign - Bitcoin is becoming more and more of a mainstream asset, and most things other than that have been proven to be bubbles and air.

"Everyone comes here to gamble," said the investor. "Gambling must be about the hottest, the biggest odds, and the most exciting things, and $TRUMP's explosion in popularity came into being."

In a zero-sum game, the money earned by 60 winners is lost by ordinary investors.

Sean made three heavy purchases at high prices, and then he quickly regretted it, sold at a loss, and soon regretted it again.

At first, the price he saw was only $0.6, and it quickly rose to $17. He tried a few hundred dollars. When he checked again the next day, the price had exceeded $30. "It doesn't matter, just consider it a missed opportunity." Sean comforted himself. But soon he couldn't help it. Ten minutes later, the price of the coin rose to more than $40. Sean was so excited that he used almost all the funds on his chain to buy at a price of $46.

Sean immediately regretted the purchase, as he had to attend an event and give a speech that day, but his mind was completely caught up in the price fluctuations. So he sold all of his shares at $45 and decided to focus on the next event.

When he opened his phone again after the event, $TRUMP had risen to $70. Regret overwhelmed his rationality - he went all in at 70, sold all when it dropped to 55, rushed in again when it rose to 65, and sold all at 60.

Sean lost more than $10,000 that day, which is not a big loss. Most of his assets are not on the chain. Previously, he mainly completed simple tasks provided by the project to get "airdrops" (free tokens), and on-chain transactions were outside his comfort zone.

What makes him more uncomfortable than losing money is that some people make tens of millions of dollars, but he doesn’t. Before entering the cryptocurrency circle, he was a professional athlete who loved to compete and enjoyed winning.

On the night when he lost money in trading $TRUMP, Sean, who had an emotional breakdown, reviewed his operations to ChatGPT and asked himself how to adjust his mindset and what books he should read?

ChatGPT suggested that he "accept losses" and "try to relax the obsession of 'making money immediately'", and gave him a list of books, the first of which was "Rich Dad Poor Dad" by Robert Toru Kiyosaki. "It is suitable for those who want to fundamentally change their perception of money." ChatGPT recommended.

Sean's understanding of money has long been changed by this book. In the spring of 2016, Sean, who was still an athlete, was training in the mountains without a mobile phone or computer. He read "Rich Dad Poor Dad" when he had nothing to do. For the first time, he learned that "money can make money" and "this is how rich people make money."

In September 2022, Sean retired from his athletic career and began to focus on Web3. He and a few friends set up a studio, focusing on discovering early cryptocurrency projects and earning "airdrops" from them. After the failure of the $TRUMP transaction, Sean decided to shift more of his energy to the chain.

Sean once hesitated whether to share the story of losing money, because he also runs a community and needs to create a money-making persona, but later he felt that facing the problem was more important than saving face.

After learning more about other people's experiences, he found that there might not be that many people making money. Apart from a few "big whales", few of his friends were showing off their earnings. And not showing off the money you make is not the style of this circle.

The data confirmed his guess. According to blockchain analysis agency Chainalysis, as of January 21, Eastern Time, among those who held $TRUMP, less than 23% of them earned more than $100, and the money lost mainly went to 60 people who earned tens of millions of dollars.

"This is a zero-sum game. The money that the winner gets is the money that the worse person loses." Jack, who currently works at a leading cryptocurrency exchange, said. In a mature securities market, large companies continue to absorb more funds as their performance grows, but meme coins are just a symbol, mainly for short-term arbitrage, and those who come first only sell to those who come later.

After $TRUMP went online, the cooperating meme coin trading platform Moonshot once rushed to the fourth place in the North American App Store download list. Moonshot previously had only a few thousand daily active users, and the transaction fees and number of users on the day $TRUMP went online were dozens of times higher than usual.

For meme coins like $TRUMP, the project initiator team initially creates a liquidity pool on the public chain, and investors trade directly with the project party. Only after it has been issued for a period of time and has a certain amount of attention and trading volume, it may be officially listed on mainstream exchanges such as Binance, Coinbase, and OKX.

Investors who discover opportunities earlier and trade directly on the chain have the opportunity to win high odds at extremely low prices. However, because they trade directly with the project party, the risk of having the fund pool withdrawn or the market crashed is also extremely high. Blind betting will lead to nine losses in ten bets.

Most investors are unable to monitor information in the first place and lack the ability to accurately judge risks. They are simply attracted by the word Trump.

An investor who has been in the circle for only two months shared on a social platform that he made more than 10,000 US dollars by buying $TRUMP on Binance the day before, and then went to the chain to buy $MELANIA the next day, and finally lost more than 50,000 US dollars.

Many people who have never done on-chain transactions rushed to open accounts. Chainalysis data shows that about half of the holders of $TRUMP and $MELANIA (a meme coin based on Mrs. Trump's image) have never purchased cryptocurrencies on the Solana blockchain. They only created crypto wallets on the day they purchased the tokens; more than 80% of the holders have a total asset of no more than $1,000 on Solana, which means that most people are not players who deeply participate in on-chain transactions.

Compared with complex on-chain transactions, Binance and OKX are the platforms that most people will use. They have the same friendly user interface as mainstream stock trading software and are easier to operate.

However, for speculative products such as memecoin, many respondents viewed Binance's listing of spot products as an opportunity to sell. They saw the surge in the sentiment of chasing the rise, and even friends and relatives outside the circle began to ask how to buy coins, so they decided to take profits and leave.

Before $TRUMP was listed on mainstream exchanges, at least more than 100,000 investors had bought it through the public chain. After Binance listed it, the price of $TRUMP rose from more than $40 to nearly double, but soon fell below $40, and at press time, it was less than $27.

A large number of new players are eager to enter the market, and some people have smelled business opportunities and started to make money by "selling water". Searching keywords in some communities, you can see many posts that provide invitation codes and teach newcomers how to download, register and use exchange apps.

Liu Lei, senior partner and director of the digital economy department at Beijing Yingke Law Firm, told us that Trump's attitude has changed the rules of the game, causing Wall Street, regulators, and investors to re-evaluate the future of the crypto industry. But it is too early to draw conclusions.

From a lawyer's perspective, Liu Lei believes that the biggest impact of the Trump team's coin issuance on American society is not mainly reflected in the economic level, but how it exacerbates the chaos in the political, financial and legal fields. Liu Lei said that Trump's supporters may regard it as a kind of "political belief investment", but if the coin price plummets, ordinary investors will be the ones who get hurt in the end.

In less than 48 hours, at least billions of dollars of wealth transfer has been completed. Just like every speculation, the initiator always makes a profit, the platform earns transaction fees, a very small number of savvy people seize the opportunity, some old users earn hard work fees and new user commissions through "hands-on teaching", and most participants who follow the tide pay for them.