Allegations of Insider Trading Arise After Trump Reveals National Strategic Crypto Reserve
Hours before Trump’s announcement about a national strategic crypto reserve, an anonymous trader made a risky move by investing $4 million in Ethereum and Bitcoin, leveraging themselves to a $200 million position. Timing their bet perfectly with Trump’s statement, the trader profited $6.8 million, causing speculation about potential insider trading.
Disruption Banking had foreseen the establishment of a national crypto reserve, but the involvement of insider trading was unexpected. The trade, conducted on Hyperliquid, a decentralized derivatives platform, was extremely risky due to its high leverage, leaving little room for error. With the cryptocurrency market’s reputation for volatility, a mere 2% fluctuation could have wiped out the entire position.
Shortly before Trump’s announcement, the trader’s Ethereum investment had nearly reached the liquidation threshold. Trump’s initial statement did not mention Bitcoin or Ethereum but other cryptocurrencies like XRP and SOL, causing the market to surge. Seizing the opportunity, the trader cashed out as the market rose, making a significant profit. Following another post from Trump emphasizing Bitcoin and Ethereum’s role in the reserve, prices continued to rise before eventually settling back down.
The substantial size of the leveraged position attracted the attention of blockchain researchers. While some speculated it was the work of a reckless wealthy individual or a major market player, suspicions of insider trading arose. With the potential profit in mind, it is plausible that many in the White House knew about the announcement in advance and took advantage of the situation for personal gain.
Crypto investor Mike Alfred openly accused Trump and his inner circle of misconduct, insinuating that they orchestrated the well-timed bet to profit from the market surge. Calls for investigations from Senator Adam Schiff and others followed, with economist Peter Schiff even labeling Trump’s actions as part of a “pump and dump scheme.”
The events surrounding Trump’s crypto announcements have sparked controversy and raised concerns about potential insider trading within the crypto market. As investigations continue to unfold, the implications of this sequence of events on the industry and regulatory oversight remain to be seen.
