On January 18, 2025, Trump announced on his social account announcement that he will launch a personal Meme currency Trump. According to GMGN data, after the issuance of Trump coins, the market value once exceeded 30 billion US dollars. However, it began to fall rapidly after a cumulative increase of more than 41200%. According to COINGLASS data, as of January 21, TRUMP coins fell 18.57%within 24 hours, and the total amount of litage exceeded 50 million US dollars. Many people are curious: What is the logic of TRUMP coins soaring and plummeting? Does it have anything to do with the plunge of mainstream currencies such as Bitcoin? Is TRUMP currency's ending of "using celebrity effects to hype cryolize currency"?

Recently, lawyer Liu Lei, a senior partner of the "Digital Economic Legal Affairs" of Beijing Yingke (Shanghai) Law Firm, accepted an interview with "Daily Economic News" interview , Trump's "issuance of coins" caused a huge shock in the cryptocurrency market! Behind Wall Street Capital Weekend "Carnival", who is "paying" for hype? "In", professional insights on the issues of TRUMP currency. This article will be based on the rise and plummeted background of Trump coins. Based on the content of the interview, it will further demonstrate related issues.

What is the speculation logic of Trump coins?

Trump coin's hype logic is actually very simple, that is, to push the price by "celebrity effect+speculation psychology".

First of all, Trump, whether you like or hate, must admit that he is "global top flow". Even if he simply opens his mobile phone to push a twee, it can attract the attention of hundreds of millions of people. The launch of Trump coins this time uses Trump's influence to attract the attention of investors and the media at once, thus creating a boom in the market. This popularity spreads quickly through social media, making more and more people feel that this is a "opportunity to get rich."

Second, the cryptocurrency market itself is crazy, and the price fluctuates is scary. Many investors come to the dream of "one night". The price of Trump coins this time is the reflection of this speculative psychology. Many people see that the price of TRUMP currency soared, and then poured into it, which further pushed the price of the currency. Especially in the early days of the project, market emotions are more vulnerableThis kind of short-term speculation will also intensify the intensity of speculation. This kind of speculative mentality is like a prairie fire, getting out of control.

In addition, coupled with the fueling of social media, discussions about TRUMP coins are everywhere on social platforms such as Twitter (X) and Reddit. The craze is getting louder. This kind of community effect can be said to be very common in the currency circle. With the spread and discussion among investors, these projects quickly gained widespread attention.

However, here comes the problem: TRUMP coin itself actually has nothing, no actual technical support, and no real application scenarios. It is like a castle in the air, completely Supported by market sentiment. According to the official financial institutions of Wall Street, encrypted digital asset tokens issued relying on the "celebrity effect" often experience a "flash-in-the-pan" surge in the early stages of issuance, and then face a long correction. Put yourself at "risk of loss". Once the heat passes or market sentiment changes, prices will collapse instantly like a deflated rubber ball. Although this kind of speculation logic can allow people to see crazy increases in a short period of time, in the long run, there are great risks.

Two TRUMP coins are issued, and Bitcoin plummets

What does it have to do with it?

Liu Lu believes that there is definitely a relationship between the sharp decline of mainstream cryptocurrencies such as Bitcoin and the hype of TRUMP coins!

First of all, the connection between them is reflected in the financial aspect. A large number of speculative funds have been withdrawn from the mainstream digital asset market and are instead chasing short-term huge profits of TRUMP coins. Such drastic changes in capital flows 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 the TRUMP coin, the entire encrypted digital asset market suddenly became emotional. The market became more convinced that Trump would relax regulations on the encrypted asset industry, which also drove a large influx of encrypted digital asset investments. At the same time, funds from mainstream currencies such as Bitcoin have also been "sucked away".

Secondly, the transmission of market sentiment is also critical. The TRUMP currency rose so sharply that investors were excited at first, but after the excitement passed, they began to worry: "Will the TRUMP currency collapse soon?" This panic will soon spread to mainstream currencies such as Bitcoin. superior. As soon as everyone gets scared, they sell quickly, and the priceNaturally, it plummeted. This economic "drag effect" will cause the currency price of the entire market to fluctuate synchronously.

In addition, since the market foundation of TRUMP currency itself is not solid, its price fluctuations are mainly driven by short-term market speculation. Therefore, once market sentiment deteriorates, investors will Risk appetite is reduced, even for projects that are not directly related to it. When the overall market declines, investors will definitely sell high-risk currencies first. This is human nature.

In general, the high degree of linkage in the cryptocurrency market and the emotional resonance of investors often cause the fluctuations of the overall market to influence each other. Therefore, there is indeed a correlation between the collapse of TRUMP coins and mainstream cryptocurrencies such as Bitcoin. However, this relationship is more of a resonance of market sentiment and real-time dynamics, rather than a closer technical correlation on another level. At the same time, investors must also understand that the main factors that truly affect cryptocurrency prices are still market sentiment, regulation and the overall economic environment.

Three TRUMP coin issuers retain 80% of their shares

Risk: Is it cutting leeks?

TRUMP coin issuer keeps 80% of the share for itself! This kind of allocation is like keeping most of the cake for yourself and only giving some crumbs to investors. Of course many investors quit, feeling like they were being treated like "leeks".

(1) The hidden danger of the issuer retaining a large share for itself

First, this currency distribution model in which the issuer retains a large share for itself does hide great risks. With so many tokens in hand, the project side can sell them on the market at any time. If they see the right moment and throw out 80% of their tokens, the market will collapse in an instant. The funds invested by investors who entered the market later may disappear overnight. This risk is no joke. Secondly, there are also big problems with the transparency of the TRUMP coin project. After all, the project side has not made anything clear about how it will develop in the future, how the tokens will be allocated, and how the funds will be used. This uncertainty makes investors nervous and increases investment risks. Third, this issuer’s reserved share model is not the “first” for TRUMP coins in the currency circle. The capital structure of many similar “air currency” project parties before has shown this typical “prophet model”, and Lessons from the past: Project parties use celebritiesThe effect attracts investors, and then casually runs at a high position. Will Trump coins repeat the same mistakes? You have to get a question mark here. As an investor, you should still fully weigh the risks and income to avoid blindly follow the trend. Investment rationally, cautious watching is a more wise choice.

(2) The pre-car learning of the "celebrity effect" speculation

The use of "celebrity effects" hype Crypto currency is not new. In the past, those "star coins" and "net red coins" were similar. They usually have the following characteristics:

1. Short-term surge: "Celebrity effect" is like a fire that can ignite the currency price instantly. But this kind of fire comes fast and fast. Once the heat fades, the price will fall into a ride like a roller coaster. There are no application scenarios. Their existence is to hype;

3. Emotional driving investment: Most investors are attracted by celebrity effects, and there is no time to study the project itself. Everyone sees people buying, and they also buy them. They are completely blindly follow the trend;

4. Insufficient transparency: The project party is always hidden, key information is not public. Some projects may have problems with inaccurate funding plans and unfair token distribution, and may even have legal risks, causing regulatory review.

So, Trump coins are indeed experiencing a stiring climax caused by the "celebrity effect" in the short term. MEME coins, the price fluctuations depend on market emotions and speculative behaviors. As for whether Trump coins are likely to repeat the problem of "using celebrity effects speculation cryptocurrency", it is still necessary to comprehensively look at the actual market conditions and other factors in the future. If TRUMP coins have always lacked the actual project foundation and application scenarios, it is likely to face the risk of plunge and bubble rupture in the future.

Four lawyers have something to say

Trump coin issuance has indeed set off a" speculation boom "worldwide, but you must know that the supervision of the lighthouse country is not fun. TheirSEC, CFTC and OFAC and other institutions have already set up a heavy line of defense on virtual currencies. If in the future, virtual currencies are identified as "securities" and not registered is illegal; if anti -money laundering investigation, etc., it will violate the red line. In addition, states also have their own regulatory laws and may shot at any time. In the future, with the entry of more institutions, the market structure is likely to change.