Is the novice in the currency circle blowing up his position and leaving the "Trump fever" to become an instant wealth?

Text: Shi Sitong

Recently, the issuance of "Trump Coin" has set off a carnival in the cryptocurrency world. The violent fluctuations of virtual currencies and the "myth of wealth creation" are also attracting many investors.

It is understood that Trump Coin began trading at an opening price of US$0.1824. The price once soared to around US$80, and its market value exceeded that of many established tokens such as TRON and Avalanche. It then continued to fluctuate and decline. In just three days, Trump Coin not only fulfilled many people’s “dream of getting rich”, it also made countless speculators shout “explosion”.

In fact, the virtual currency market is extremely volatile and extremely risky, which has become a consensus in the industry. According to industry insiders, virtual currencies are difficult to analyze using traditional fundamentals, valuation and other methods, and are more like alternative speculative products. If investors are interested in the crypto market, they must study systematically and enter the market cautiously.

1 “Trump fever” continues to spread, and the encryption market attracts attention

It is understood that this wave of "Trump fever" has also spread to hot searches on major new media platforms, attracting many "novices in the currency circle".

"When I bought it, it was 30 US dollars, and the price was 78 US dollars." Mr. Wu, an investor in the currency circle, told a reporter from the Financial Associated Press that because he initially waited and watched for a while, he missed the opening low of Trump Coin, but fortunately, it ended up being there. Make a decisive move at the high point of $78 and "get off" safely.

In Mr. Wu’s view, this “Trump craze” is “momentary wealth.” It is understood that Mr. Wu started to contact the blockchain 10 years ago and has been involved in the currency circle for many years. When new coins are released, he usually buys them based on the situation. “The issuance of new coins will generally increase, and how much you earn depends on your ability to control it,” he said.

Some are happy and some are sad. After the high point, Trump Coin began to fluctuate and fall continuously, rising and falling sharply. The mood of another investor, Mr. Gao, also fluctuated accordingly. "It's best not to buy. You may get rich (coin speculation) or lose everything." Mr. Gao lamented to a reporter from the Financial Associated Press.

According to reports, after the issuance of Trump Coin, Mr. Gao bought 60 "test waters" at an average price of about US$32, but he did not expect the increase to be so high. Therefore, after accidentally missing the previous high of $82, Mr. Gao chose to continue to "hold the currency" and wait and see.

At that time, Mr. Gao also had high expectations for the short-term trend of Trump Coin. Before Trump officially took office, Mr. Gao once again bought 80 Trump coins at a price of $53. However, things went wrong and Mr. Gao failed to wait until Trump Coin "regained its glory". He finally chose to clear his position at a price of US$32, and regretfully left the market amid this wave of craze.

2 There is a consensus that virtual currencies are extremely risky

"Since Trump did not publish any documents related to the encryption industry on the day he took office, Trump Coin fell a lot." Regarding the current trend of Trump Coin, Shuai Teng Blockchain Web3 Investment Research Manager Chen Shuai told Cailian According to the analysis of the reporter.

Looking forward to the subsequent market, he believes that Trump’s term has just begun, and there may be more possibilities for Trumpcoin in the next four years. "With the loosening of encryption policies in the past four years, more people may join, and even celebrities from other countries will follow suit and issue coins."

For investors who are waiting and watching, Chen Shuai suggested that virtual currency is different from the traditional stock market. "The currency circle is very risky, and capital preservation is the first priority."

At the same time, the above-mentioned investor Mr. Wu also reminded that investors who do not understand blockchain and virtual currencies should be cautious when entering the currency circle. The rhythm of the currency circle is "fast in and fast out", and the risks are also very high.

In Chen Shuai’s view, there are certain legal risks in virtual currency transactions. Regardless of whether it is a loss or a profit, it is very likely that the funds involved will be received during the withdrawal process, resulting in the bank card being frozen and causing asset losses. For "novices in the currency circle", it is likely to cause financial losses due to lack of knowledge in identifying the authenticity of projects and immature trading skills.

In addition, some industry analysts bluntly stated that virtual currencies are difficult to analyze using traditional fundamentals, valuation and other methods. They are more like alternative speculative products and are not suitable for ordinary investors.

“The virtual currency market is extremely volatile, far exceeding that of ordinary stocks, and its potential risks are self-evident,” he said. At the same time, due to the high concealment of virtual currency transactions and the difficulty of identification and identification, related transactions are also easily used for illegal and criminal activities such as money laundering, illegal fund-raising, and tax avoidance.