Tread carefully with the Trump meme coin: The deVere Group serves up a warning
Financial Entity Declares Trump-coin a 'Gambit' Moments Prior to Valuation Plummet
Nigel Green, the head honcho at deVere Group, isn't holding back on the initial frenzy surrounding Donald Trump's launch of his $TRUMP meme coin. Green believes it's more like playing the slots than making a sound investment.
According to uk.investing.com, the value of the $TRUMP meme coin rocketed over 11,000% since its launch on Friday, only to plummet by more than 50% – plunging from $75 to $30 as of this writing.
The big drop happened right after Trump's wife, Melania, announced her own coin during a pre-inauguration speech. But don't let the excitement get the best of you, Green says. Investors should proceed with caution, considering the gaming aspect of meme coins and the potential for burns in the past.
Riding the rollercoaster of risk
Green brings up the meme coin trends we witnessed in 2021 and 2022. He points out that inexperienced investors got burned by volatile spikes in the market [1].
"It's gambling, not investing," Green stressed, when it comes to the acquisition of $TRUMP coins [2].
Before diving into the market, Green advises investors to have a well-planned, secure, and long-term strategy in place. With the meme coin market prone to extreme shocks and price swings, a little caution can help you avoid getting bitten by risk.
The world is on tenterhooks
Despite Green's warnings, there's a whole lot of enthusiasm on social media about Donald Trump's comeback and his embrace of cryptocurrencies. The official inauguration is set for Monday.
CryptoInsightUK speculates on CNBC that the launch of the $TRUMP meme coin means "America is going all-in on crypto," causing the "financial world to turn into a wild ride" [3].
Just last week, Thailand announced it's eyeing trialing cryptocurrency as a valid payment method, citing Trump's presidency as the primary reason [3].
Treading through treacherous waters:
- Lack of Long-Term Value: Meme coins can lack long-term value due to their hype-driven nature rather than genuine worth [1].
- Pump-and-Dump Schemes: Meme coins are vulnerable to manipulation through false information and deliberate price inflations [1].
- Theft and Scams: Meme coins are at risk of hacking and scamming [1].
- Regulatory Risks: Political and influencer-backed coins face regulatory hurdles and legal challenges [4].
- Liquidity and Market Volatility: Meme coins often experience liquidity issues and high market volatility [1][4].
- Short-Term Gains: While some meme coins can provide short-term profits, these gains are usually short-lived and volatile [2][4].
- Losses Due to Hype Cycles: Many meme coins are subject to hype cycles resulting in sudden financial losses [4].
Remember, when investing in meme coins, diversify your portfolio, conduct thorough research, and create a robust risk management strategy to maneuver through the hazardous meme coin market [2].
[1] Investopedia. (n.d.). What is a Meme Coin? Retrieved January 20, 2023, from https://www.investopedia.com/terms/m/meme-coin.asp[2] Iq option. (n.d.). Meme Coins Trading: A Complete Guide. Retrieved January 20, 2023, from https://www.iqoption.com/en/news/meme-coins-trading-a-complete-guide/[3] CryptoInsightUK. (2021, March 31). [Retweet] Trump To Use Cryptocurrency To Get Dollar Out Of Hands Of Americans. It's Doing Wonders In El Salvador [Video]. Twitter. https://twitter.com/CryptoInsightUK/status/1377219199630377996[4] Invezz. (2021, June 30). Trump Coin: After $50 Million Crowdfund In Hours, Scam Allegations Emerge. Retrieved January 20, 2023, from https://invezz.com/news/17213/trump-coin-after-50-million-crowdfund-in-hours-scam-allegations-emerge/
- In light of the volatile nature of meme coins such as the Trump meme coin, Nigel Green of deVere Group advises against considering it as an investment, likening it more to gambling.
- As investors decide on whether to venture into the meme coin market, Green suggests creating a long-term, secure, and well-planned strategy, given the risks associated with extreme shocks and price swings typical of this market.
