TRUMP Coin catastrophe – 810,000 investors lost over $2 billion, claims NYT report

• TRUMP investors, mainly retail, have lost over $2 billion after a sustained decline in the altcoin’s price
• On the contrary, early larger traders and insiders pocketed over $6 billion in profit

Since its launch in mid-January, the U.S President’s official memecoin, TRUMP, has fallen by nearly 80% from $76 to $16. 

The decline has exposed +810K investors to losses of over $2 billion, according to a report compiled by the New York Times (NYT) and blockchain analytics firm Chainalysis.

Part of the report read, 

“Across the first 19 days of trading, a total of 813,294 wallets registered losses…The losers — those who paid more for the token than it is now worth — cumulatively have lost $2 billion, in actual or paper losses.”

Early traders, insiders profited $6.6 billion

On the contrary, the NYT report added that a staggering $6.6B in profit was netted by early traders and insiders. 

“The profits mostly secured by the early buyers were enormous – A total of $6.6 billion in cashed-out profits.”

Compared to +810k losers, Chainalysis noted that less than 700k traders profited from the TRUMP memecoin.  In fact, Nansen, another analytics firm cited in the report, stated that most early winners were large players.

“The early trades were some of the most profitable: 31 of these large early traders made $669 million in profits in a matter of days.”

But some large players were reportedly insiders based on timely positioning and execution.

Notably, the first-ever account to make a public bet on TRUMP, with a +$1M stake, was reportedly created 3 hours before the President announced the crypto on 17 January. 

Besides, the memecoin (contract address) was created 12 hours before the President announced it. According to the report, this offered insiders ample time to position themselves.

Interestingly, retail flocking to TRUMP traded more than whales. Unsurprisingly, however, whales made more profits than retail – A trend evident five days after the TRUMP began trading. 

In an analysis report on 23 January, Chainalysis noted that over 60 whales had made +$10M. 

Source: Chainalysis

It’s worth pointing out, however, that the TRUMP craze elicited mixed views as some praised it as a historic on-chain wealth creation phenomenon. 

The sheer size of TRUMP losses also attracted criticism though. Especially as opponents referred to it as ‘extractive,’ ‘exploitative,’ and a ‘pump and dump scheme.’ 

Corey Frayer, a former crypto advisor to SEC, castigated the President and told NYT, 

“The president is participating in shady crypto schemes that harm investors while at the same time appointing financial regulators who will roll back protections for victims and who may insulate him and his family from enforcement.”