On January 18, two days before its inauguration, President Trump started his name: Official Trump (Trump). The coin rapidly increased the price of market capitalization of about $ 14 billion.
However, shortly after the opening, Blockchain data revealed that several Trump’s major holders have sold millions of dollars, which is a sales -off, which has raised the coin market cap to about $ 2 billion.
In a letter to the Treasury Department on January 22, the Senate Banking Committee expressed concern over the ethics of Trump’s latest crypto project regarding Finance journalist Jacob Silverman, calling it a “classic”. Meme Coin Pump and dump.
But what is the pump and dump exactly? And is this the correct explanation of the Trump coin?
What is the pump and dump?
A pump and dump is an investment scheme in which a group of people “pumps” the cost of an asset that has a very low internal price, such as the Mem coin or a Penny StockSpreading about it on Social Social Media or Other Communication Channels to Create Farnas.
Once coffee “outdoor” investors purchased in this asset, the “internal” of the scheme-who owns plenty of assets-dump their shares at high, hype fuel price.
The sale often crashes the cost of the asset, and the accident usually surprises the outskirts. It often owns an asset that costs less than the price he paid for him, or is sold at a loss.
Today, pumps and dump schemes are mostly associated with cryptocurrency, where they are also known as “”.Pulls the carpet. But historically, pumps and dumps often include small caps stocks instead. Film Wall Street wolf Jordan is a true story of Belphort, a former stock broker who runs pump and dump schemes on stocks stock through a widespread sale operation.
Belfast activities eventually attracted the attention of regulators such as the Securities and Exchange Commission, which led to his conviction and fraud. Crypto markets, which are less regular than the stock markets, offer less risk of being caught by today’s bailforts.
How to avoid getting stuck in the pump and dump
“The first way to avoid carpets in Crepto is to refrain from investing in anything other than Bitcoin,” said Alexander Bloom, two prime CEO, two prime CEO, two prime CEO, two prime CEO, a digital asset -based Investment Advisor, a digital asset -based Investment Advisor, two prime CEO. The reason for this is Butt coinThey say, the most established is cryptocurrency.
If trading trading in currencies, just understand that you are gambling. If one should do it, then coins that are more long -time tall long tall tall tall tall tall tah lol tah lol tah lol tah lol tah lol tah lol tah lol tah lol tah lol. It includes coins at Top 25 at CoinMarketcap.com.
According to Bloom, some red flags of the crypto pump and dump scheme include high concentration of ownership, ambiguous plan for the future, and low -quality crypto exchange list. Investors can avoid the last of them Leading Centralized Exchange Such as coins, Gemini, Crack or Crypto.com.
Bloom said, “If you feel intelligent and a token creator uses a lot of tech jirgs to talk on the heads of regular people, you should also be careful – this is another sign of a potential scam.”
Is Trump a pump and dump?
Not enough. Trump’s story contains elements of the pump and dump scheme. This coin was promoted on social media – in particular, while the incoming president posting about it on his X (formerly Twitter) account – which looks like a pump..
And a few days after Trump’s X -post, a group of big investors in the coin sold in large quantities of time, which can be described as a dump.
However, a common pump and the dump scheme adds the inflammatory to the pump (which is usually the largest owner of the asset). In this case, it will be President Trump himself, whose Trump organization owns 80 % of the provision of Trump coins and has begun to purchase from his social media posts.
But Trump’s organization has not sold its shares, making it difficult to describe the recent rise and fall of Trump as “classic meme coins and dumps”, as Silverman did.
However, there are several other resemblance to the Coin Pump and Dump Scheme, such as high concentration in ownership and lack of projects for the future of the project. If Trump’s organization sells its shares without a warning, it may be rapidly turned into a pump and dump in the future.
The price of Trump, though below his timely height, is still beyond the cost of his initial offer. The stake of the Trump Organization is subject to a two -year lockup period. It cannot be sold before.
The CIC Digital, affiliated with the Trump Organization, which launched the coin, called Trump a “expression of support” and not as an investment.
At the time of publication, neither the author nor the editor had positions in the aforementioned investment.
