Is the outside cryptocurrency players attracted by TRUMP still making money now?

Author: Jaleel Jia Liu, BlockBeats

Time rewinds to January 17, just two days before the new pro-cryptocurrency president of the United States takes office.

On this day, Trump unexpectedly announced the launch of a cryptocurrency MEME coin called $TRUMP on his social platform Truth Social.

In a matter of seconds, $TRUMP ignited the start of the 2025 cryptocurrency market, becoming the most powerful celebrity coin in history. Within 24 hours of its launch, it was given the green light and quickly listed on top trading platforms like Coinbase and Binance, with a 24-hour trading volume exceeding $10 billion, more than three times that of Bitcoin.

Apart from conspiracy theorists, the early adopters in the cryptocurrency trading circle were the first to profit from $TRUMP. Even amidst various suspicions of "Trump's official account must have been hacked," a group represented by 0xSun quickly acted on their years of accumulated on-chain data monitoring capabilities to buy in early. Around the 10th minute after $TRUMP was issued, 0xSun began purchasing, buying $600,000 worth within half an hour at an average cost of only $0.6, making over $27.5 million in profit, achieving legendary status.

But the problem is that the MEME coin market is a typical zero-sum game, lacking the support of technological innovation, fundamentals, or any value creation, only distinguishing between early and late buyers. Therefore, not everyone can be as lucky as 0xSun. As the hype faded and the issuance of Trump's wife coin indirectly increased the supply of $TRUMP, the price of $TRUMP fell from a high of $72 to around $17.

According to early statistics, the data on profitable addresses showed a clear normal distribution, with 560,000 addresses still in the red, while only 300,000 had realized profits.

Data source: Dune

PHD Liu Zi Also Can't Escape Being Stuck

The market is not always friendly to everyone. KOHA is one example; he is one of the 560,000 people stuck.

KOHA is a Canadian PhD student in a science and engineering field who occasionally invests in U.S. stocks. In 2024, he made a small profit by betting on Trump's election and buying shares of Trump's company, DJT. This success gave him confidence in Trump's business model, leading him to mistakenly believe that $TRUMP would have long-term value like DJT stock.

However, the pace of the cryptocurrency market is much faster than that of U.S. stocks.

When $TRUMP was issued, it was Saturday morning in Beijing, but it was late Friday night in the U.S. and Canada. Like many locals who were resting, KOHA did not pay attention to the event immediately. By the time he learned about the issuance of $TRUMP, it was already the next day for him.

Due to Trump's often unfriendly policy adjustments towards international students and the close relationship between Canada and the U.S., lucky KOHA found himself in an environment very focused on Trump's actions. The next day, when KOHA learned about Trump's coin in a group chat, $TRUMP had already risen from its initial price to $28.

He immediately took action, trying to buy $TRUMP through the Moonshot platform, but due to identity verification, uploading his driver's license, and learning how to purchase, he lost some time. By the time he successfully bought in, the price had already risen to $30. Nevertheless, he hardly hesitated and decided to enter the market.

"This four-year term has just begun, and Trump is very centralized in this regime. The U.S. president can only serve two terms, so everyone agrees that the second term is about making money and doing business. Everyone in the world wants to do business with him, and $TRUMP is a pathway and threshold for that," KOHA's logic is simple.

In KOHA's view, the more people want to establish a connection with Trump through this pathway, the higher the price of Trump coin will be. "This market is clearly much easier to manipulate than DJT, and there’s no need to report to the SEC for sales. The total supply is 1 billion, with only 200 million in circulation, and 80% of the tokens are still in my hands. I immediately sold all my DJT and bought $TRUMP coins."

KOHA is not the only investor who believes that Trump's business model can be replicated in the cryptocurrency market. In fact, many believe that Trump's issuance of $TRUMP is part of his financial strategy.

"Trump cannot integrate into this system, nor can he merge with it. His falling out with his daughter Ivanka is actually a reflection of the two factions in financial ideology, the falling out between capital, even blood relations cannot merge." KOHA analyzed that, in his view, the traditional financial market is controlled by Wall Street and the Democratic Party's Jewish capital, and Trump has always been unable to integrate into this system. His only way out is to take a different path, leveraging the decentralized nature of virtual currency to establish his own financial order.

KOHA's understanding of the cryptocurrency industry is "the unexpected beneficiaries of the falling out between two capitals." And Trump has indeed shown a friendly attitude in policy: relaxing cryptocurrency regulations to provide a freer trading environment; Bitcoin breaking $75,000, leading to a bull market frenzy in the entire cryptocurrency market; Republican lawmakers promoting the establishment of a Bitcoin strategic reserve to further enhance market confidence. All these factors gave KOHA a grand investment narrative, convincing him that $TRUMP is a long-term asset.

When KOHA discovered that $TRUMP was continuously rising, he increased his position again at $40, but by the time Monday's trading day came two days later, $TRUMP had already transitioned from the FOMO (fear of missing out) phase to the profit-taking phase. Market liquidity decreased, buy orders diminished, and the coins in KOHA's hands gradually turned into trapped liquidity, with an average price of $36.

This Round of Cycles is a Clear Gamble

Another person stuck like KOHA is Li Yi.

However, unlike KOHA, who has no experience in the cryptocurrency market and doesn't even know the major trading platforms, Li Yi has been in this market for a while. Compared to newcomers who are unfamiliar with trading platforms, Li Yi at least knows where to trade and understands that the logic of the cryptocurrency market is not important; emotion is the only determining factor. Li Yi mingles in multiple cryptocurrency trading groups, constantly monitoring market dynamics and closely following some traders who call themselves "crypto veterans."

He did indeed make some money.

In the early trading of $TRUMP, he completed a buy at a low of $17 with the operation of "if you lack insight, you must follow," and successfully sold after the price surged, making a profit. However, after making money, he became somewhat overconfident.

After making a profit, Li Yi did not choose to exit but began looking for "the next $TRUMP."

Sure enough, the Trump family did not disappoint Li Yi. Two days after the issuance of Trump coin, Melania coin ($MELANIA) was issued. Meanwhile, the concept of "family coins" began to gain popularity in cryptocurrency trading groups.

Although it did not receive official support, the name of Trump's youngest son, Barron, was touted by the community under the banner of "Trump family," boasting of being "the coin of the future president" against the backdrop of $TRUMP's price surge. There were even rumors that Trump's family nanny had issued a coin, quickly attracting a batch of funds. And Li Yi was one of them.

He naively believed that the logic of these coins was the same as $TRUMP and that they could surge like $TRUMP. Thus, he invested most of his profits into the wife coin and son coin.

But the market did not give him a second chance.

The other family coins quickly went to zero, and Li Yi's principal was trapped, with profits evaporating instantly. Currently, he is trying to find out how to buy World Liberty Financial (WLFI, Trump's family's decentralized finance project), hoping to recover his losses through a new speculative project. "I'll take another gamble; WLFI might continue the legitimacy of Trump coin," Li Yi said.

In this round of cycles, the biggest change is that everyone has laid their cards on the table.

No more packaging, no more pretending to be a project with technological innovation, and no need to spend $5,000 to hire someone to write a fancy English white paper, piling up a bunch of obscure new concepts.

The gameplay of this bull market is simple and crude—directly speculating on emotions, celebrities, topics, and cognitive differences. Utilizing FOMO emotions, a series of new altcoins are created, harvesting the fantasies of new investors.

In the past, new chain project factories would put in some effort to disguise themselves as seemingly innovative projects. Looking back at the early launches of BSC, Aptos, and Arbitrum, the market experienced the same scene—a swarm of anonymous "innovation project factories" rushed in, utilizing the new chain effect to harvest TVL and users, and when the market heat faded, they would directly shut down communities and websites, disappearing with the funds.

Behind these projects are often familiar faces, just changing their vests and modifying a few codes to become new popular coins. They started as the first batch of popular projects on a new public chain, anonymous and mysterious, with no well-known investors backing them and no major company audits, yet they could always be hyped by KOLs, creating waves of wealth myths through the community's FOMO emotions.

But now, the market seems to have reached another consensus: this is a new gambling game, a wealth transfer game.

No one talks about "technological revolution" anymore, no one talks about "changing the world," everyone tacitly understands—if you lose this round, just wait for the next gamble. If you are willing to bet, you must accept the loss; the cryptocurrency circle is originally meant for this. It is said that even the guys in the nightclubs in Hangzhou know to short altcoins now.

And Li Yi is just another participant in this wealth transfer game.

Those Who Short Are the Winners?

Among the newcomers who entered the cryptocurrency circle through Trump coin in this interview, only Professor L walked away with profits.

In the storm of $TRUMP, most people were betting on the rise, desperately pushing the price higher, only to get stuck at the peak. However, some chose the opposite direction—shorting—and successfully profited against the market frenzy.

Professor L, a finance professor and a seasoned futures trader. He has long studied market structures and knows that the price volatility of cryptocurrencies is far more severe than that of traditional financial markets. As a MEME coin, $TRUMP has no fundamental support and relies entirely on market sentiment, which means it is likely to surge in the short term and then plummet.

But his trading strategy is not simply betting on a market downturn; it is a basic "hedging" trading strategy in futures trading:

He used $50,000 to buy spot to ensure he wouldn't miss out on the rising profits. At the same time, he shorted $TRUMP contracts with $10,000 at 5x leverage as a risk hedge. If $TRUMP continues to rise, his spot gains can cover the losses from the contracts. If $TRUMP plummets, his short position can offset the losses and even bring excess returns.

Professor L does not agree with many retail investors' gambling-style leveraged trading, "The essence of contracts is to disperse risk, not to amplify returns." But most people do not understand this principle.

At the same time, Professor L strongly agrees with Peter Lynch's view: "Large funds that short do not sell short at the peak; they wait until the market has halved and retail investors say this drop has stopped and start bottom-fishing, and that is when the shorting funds like to short." This is precisely why Professor L chose not to rush to close his short position during the rapid decline after $TRUMP's explosive rise.

In trading groups, there are always people boasting about their high-leverage achievements: "I opened a 50x leveraged short today and made $2,000!" "I blew up my long position yesterday, but made it back with my short today!" But the reality is that this strategy is ultimately gambling.

Professor L's success stands in stark contrast to those retail investors who blindly opened high leverage and gambled on fate. The market's extreme volatility, combined with high leverage, can lead to an account being wiped out in an instant with just one reverse trend. Many retail investors, at the peak of $TRUMP, frantically opened long leverage, fantasizing about the price continuing to soar, only to be caught in a market reversal, leading to liquidation.

Ultimately, when the price of $TRUMP fell from its peak, Professor L's hedging strategy allowed him to secure stable profits. He did not rely on the speed of 0xSun to reap the rewards, nor did he get trapped like Li Yi under FOMO emotions, but instead survived in the extreme conditions of the cryptocurrency market through rational risk management, consistently making profits.

How Many Pits Must Newcomers Step Into in the Cryptocurrency Circle?

In this wave of Trump coin frenzy, those entering the market are not just inexperienced novices but also many seasoned players from traditional investment markets. They have been through the A-shares, commodity futures, and even tea speculation markets, witnessing various capital games.

Professor L is lucky, but not all veterans can replicate their past success in the cryptocurrency circle based on their previous experiences. In other words, they must step into many pits before they officially start trading.

"A-shares have short bull and long bear markets; speculating on small and poor stocks is the way to survive." This is the consensus among many domestic stock investors, including "Su Bing Ge." For a long time, the speculative style of A-shares has accustomed him to short-term trading, picking up low-priced stocks, and betting on market sentiment.

When Su Bing Ge saw $TRUMP, a coin with a strong speculative concept, he immediately felt familiar—"Isn't this just a small-cap stock with high control?" Thus, he decided to "take a gamble."

Buying $TRUMP at a high of over 69 USD, Su Bing Ge tried to calculate the possibility of breaking even. As the coin price continued to drop, during an interview with BlockBeats, the price of $TRUMP was $26, which meant that to raise his cost price, he needed to invest an additional 50,000 RMB if it rose by 5%. But he knew that this was just "the fantasy of a retail investor."

After being stuck, Su Bing Ge realized that the rules of the cryptocurrency game are far more brutal than those of A-shares: "There are no price limits, capital flows in and out completely without rules, and the market makers can wash the market instantly; there is no regulation, and market makers can withdraw liquidity at any time, controlling the market at will; there is no time window, trading 24/7, and retail investors have no chance to catch their breath." Su Bing Ge, filled with emotion, wished he could complain for three days and nights.

Many investors accustomed to short-term strategies in A-shares not only failed to make money in $TRUMP but also lost their principal by trying to trade in and out repeatedly.

But the cryptocurrency circle is a place that devours without spitting out bones. After overcoming the discomfort of traditional stock trading and cryptocurrency trading, Su Bing Ge discovered that he had stepped into another pit.

"I thought it was hopeless to break even and prepared to cut my losses, only to find that what I bought was a fake coin." Before the spot trading platform went live, Su Bing Ge followed the operations of the big brothers in the trading group and bought his first $TRUMP using a web3 wallet from a certain trading platform.

Since he had never used a web3 wallet before, he had always been watching the quotes in the group. After buying, he did not check again until he was ready to sell, only to discover that his money had not entered the real market but had been swallowed by a "fake coin contract" deployed by hackers.

And this is still a relatively simple way of being scammed in the cryptocurrency circle; there are more pits waiting for "Su Bing Ge."

The mixed-quality paid cryptocurrency trading groups are like boiling frogs in warm water. Initially free, they attract users with photos of female influencers, screenshots of making money, or pictures of buying cars and houses. The big brothers inside enthusiastically teach newcomers how to open trading accounts and how to trade, and at this step, the big brothers can receive a commission from the trading platform as a tuition fee.

Using retail investors' funds to boost orders and brush transaction fees is still acceptable; the most direct method is to lead trades to harvest retail investors. They claim to have "precise insider information," but in reality, it is all a designed harvesting scheme. Currently, the most common scam on Xiaohongshu is the so-called "quantitative trading robot strategy," claiming to achieve a monthly return of 30%.

The cryptocurrency circle is a completely different world. The games here are high-frequency confrontations measured in "seconds," and every second missed could mean huge losses. Worse, many seasoned players, with their strong capital, often adopt a "large capital heavy bet" strategy, only to become targets at the "top" of the market. Those controlling the market had already prepared before they entered, waiting for these "big fish" to take the bait and quickly absorb their funds.

In this smoke-free PVP confrontation, the flow of funds and market control is always in the hands of a few. For those still stuck in traditional market thinking, the rules of the cryptocurrency circle often catch them off guard. Because here, risks coexist with opportunities, but more often, there are risks.

When these seasoned players come to their senses, they find that not only have they not earned a fortune in the cryptocurrency circle through years of experience, but they have also become typical examples of "being harvested upon entry." The experience rules they once relied on have become utterly useless in this brand-new market.

And all of this is the tuition they must pay when entering this industry.