Trump disrupting the crypto space, Bitcoin soaring and plummeting; how can ordinary people seize the wealth opportunities in the crypto world?
'Woken up at 3 AM, Bitcoin plummeted 15% in an hour, and my increased position is down $50,000!' This experience of investor Xiao Lin has become quite common in the crypto space — and the 'trigger' is often a tweet from former U.S. President Trump. From hinting at regulatory relaxation leading to an 8% single-day Bitcoin surge, to blasting projects causing tokens to dive 20%, this 'non-crypto person' frequently disrupts the market. Should ordinary people panic or rush in? This article helps clarify your thoughts.
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Why can Trump 'stir up' the crypto space? Understand these 3 logics.
1. Market sentiment leverage: As a highly watched political figure, his statements carry inherent traffic. Last year, when he mentioned reviewing crypto regulation during his campaign, Bitcoin trading volume surged by $3 billion within 10 minutes, driving up prices as investors followed suit.
2. Related asset linkage: The team revealed that after testing the 'Trump-themed Meme Coin', similar tokens surged, with one related token rising 300% in a single day. 'Celebrity IP + Crypto' has become a short-term speculative hotspot.
3. Regulatory expectation game: He has criticized the Federal Reserve for over-regulation, suggesting a return to the White House or policy adjustments, leading the market to anticipate regulatory relaxation, prompting institutions to position themselves and drive mainstream coins up.
But caution is needed: his statements often serve political purposes. Last year, he promoted cryptocurrencies to attract votes, and after being elected, he failed to deliver on his promises, leaving many trend followers trapped.
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In the midst of wild price swings, here are the 3 pitfalls ordinary people should avoid.
1. Chasing 'celebrity concept stocks': After Trump mentioned 'optimism about blockchain payments', a certain token surged 200%. Some heavily invested, only to see the price halved three days later due to 'code plagiarism'. Projects lacking technical support quickly lose their heat.
2. Treat 'short-term fluctuations' as 'long-term trends': Earlier this year, he hinted at supporting Bitcoin legalization, causing Bitcoin to surge to $45,000. Investors thought 'the bull market is coming' and increased their positions, only for it to drop back below $40,000 a week later.
3. Ignoring regulatory risks: Although he mentioned relaxing regulations, the U.S. SEC's crackdown on crypto hasn't ceased. Last year, a Trump-related Meme coin was sued for non-compliance, leading to investors' assets being frozen and losses.
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3 practical strategies to capture real opportunities.
1. Focus on 'hard tech' projects: Real opportunities are linked to the implementation of technology. A certain blockchain cross-border payment project, due to partnerships with three banks, maintains stable prices amidst volatility; projects relying on 'Trump IP' hype often fall back to their original prices within a month. Look for three criteria: solving real problems, having a technically skilled team, and open-source code.
2. Use 'dollar-cost averaging' to combat volatility: Invest 10% of your monthly salary into mainstream coins like Bitcoin and Ethereum. Last year, some invested in Bitcoin through dollar-cost averaging, and despite multiple fluctuations over 10%, their annual returns still reached 25%, far exceeding chasing highs and cutting losses. Dollar-cost averaging is suitable only for mainstream coins and not for niche tokens.
3. Focus on 'policy implementation' rather than 'celebrity statements': Long-term trends are determined by policy and technology. Although the U.S. crypto tax transparency bill may have short-term impacts, it is beneficial for institutional entry in the long run. Keep an eye on regulatory official documents; application areas supported by policies are more worthy of investment.
Finally, I want to say:
Trump's interference is a collision of the 'celebrity effect' and 'high volatility in crypto'. Ordinary people shouldn't be misled by short-term news; the value of cryptocurrencies comes from their ability to solve problems through technology. Remember to 'not chase trends, not gamble on the market, and focus on value' to protect your capital and seize real opportunities.
