President-elect Trump launched his own cryptocurrency overnight and swiftly appeared to make more than $25 billion on paper for himself and his companies.
Why it matters: The stunning launch of $TRUMP caught the entire industry off-guard, and speaks to both his personal influence and the ascendancy of cryptocurrency in his administration.
- It also speaks to the nature of the crypto industry that someone could have $25 billion worth of something that literally did not exist 24 hours previously.
I’d like to add that trade volume is only a slightly better indicator, because wash trading is very easy in crypto. Wash trading happens when the coin’s owner and/or an accomplice buy and sell coins back and forth among themselves. It’s easy to do if you have control over a huge amount of coins, because you printed them yourself at the low low price of $0. This has two effects: the trade volume grows, which makes it look like there is public interest in the coin, and you can pump up the price at the same time.
Very true.
I suppose I should have said “Fiat dollar trading volumes” although that’s an oversimplification. The question you’re really trying to answer is “How much actual demand is there for this invented commodity?”
The answer is, inevitably, not nearly enough. When 80% of the available supply of something is locked up in a vault somewhere, there’s absolutely no way that 80% could be liquidated without crashing whatever market exists.