I Asked ChatGPT To Explain TRUMP Crypto to Me Like I’m 12: Here’s What It Said

Some people think there’s no better way to get rich quick than by risking your money on an unproven cryptocurrency. Many crypto projects boast stability and long-term returns, only to fall off a cliff shortly after launch, leaving small-time investors to pick up the pieces. However, on Jan. 18, two days before President Donald Trump was sworn in for his second term, a meme coin in his name launched, leading many to question if it was a scam.

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I posed five questions to ChatGPT to get the breakdown on $TRUMP and whether it’s a good idea for someone to invest in it. Because crypto can be a bit complicated for some, I asked ChatGPT to explain the answers as if I were a 12-year-old. This is how it responded.

What Is $TRUMP?

ChatGPT said, “So, TRUMP cryptocurrency is a digital coin or token, like Bitcoin or Ethereum, but it’s named after Donald Trump, the former U.S. president. It’s not actually created or run by him, though. It’s made by a group of people who think it’s fun or interesting to have a cryptocurrency with the Trump name on it. This coin exists on the internet, and you can buy or trade it just like other cryptocurrencies.”

$TRUMP is a type of cryptocurrency known as a meme coin. Meme coins aren’t as serious as the major coins like Bitcoin, and many begin as a joke. These coins are often much more volatile, taking off or crashing in seconds.

Also, some groups like NPR dispute the fact that a group of people completely independent of President Trump created the coin, claiming he and his business partners coordinated the operation. However, after its launch, Trump and his sons publicly distanced themselves from any involvement.

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How Does $TRUMP Make Money?

ChatGPT’s response: “TRUMP cryptocurrency makes money mainly by people buying and selling it. Here’s how:

• Imagine you buy a TRUMP coin when it’s cheap.
• Then, you sell it later when it gets more expensive.
• The people who create or run the coin usually make money from transaction fees (when someone buys or sells) and sometimes by selling coins themselves.

Basically, TRUMP cryptocurrency could make money for people if the price goes up, but it’s risky — prices can go up or down quickly.”

This is an accurate breakdown of how any cryptocurrency works. However, ChatGPT doesn’t explain one of the biggest risks in investing in meme coins, which is the rug pull. This is when the coin’s developers secure a large number of coins at a low price. Once the public begins to buy coins and raises the value, the developers quickly trade their high-value assets and abandon the project, leaving the other investors with nothing.

Story Continues## How Much Has President Trump Made?

“Here’s the thing: Donald Trump has nothing to do with this cryptocurrency. Even though it’s named after him, he’s not involved in it, and he doesn’t make any money from it. The people behind it are the ones making money when the price of the coin goes up, but Trump himself hasn’t earned anything from it,” ChatGPT said.

While ChatGPT is adamant that Trump had nothing to do with the coin and made no profit, the truth is hard to say. Some news sources claim the entire project to be a scandal, but no charges have been filed.

How Does the Economy Impact $TRUMP?

ChatGPT said: “The value of cryptocurrencies, including TRUMP, is super sensitive to what’s happening in the world economy. If people are feeling good about money and want to take risks, the price of crypto can go up. But if people are scared about losing money, the price can drop.

Things like inflation, interest rates, or government decisions can affect how much people are willing to pay for TRUMP or other cryptocurrencies. When the economy is doing well, people might feel more comfortable buying coins. But when things are shaky, they might sell and make the price drop.”

ChatGPT is correct about the connection between the economy and cryptocurrencies. For example, look at what happened during COVID-19. The U.S. government issued stimulus checks to citizens in an attempt to boost the economy. This led to many new buyers taking a risk with the “free” money they’d received and trying out cryptocurrency. The government issued three rounds of stimulus checks between March 2020 and March 2021. For Bitcoin, on Feb. 29, 2020, its price opened at $8,671.21. And on April 1, 2021, after all stimulus checks were out, Bitcoin’s price opened at $58,926.56.

Is $TRUMP a Good Investment?

For its final answer, ChatGPT responded with, “Here’s the important part: Cryptocurrencies are risky. Just like if you were to invest in stocks or other things, the price of TRUMP can change very quickly, and sometimes it can drop a lot. There’s also the fact that TRUMP is not as popular or well-known as big cryptocurrencies like Bitcoin, so it could be even riskier.

If you’re thinking about investing in TRUMP, ask yourself:

• Do I understand what I’m investing in?
• Can I handle it if the price goes down?
• Is it just a fun thing, or do I think it will be worth more in the future?

It might not be the best idea to put all your money into something like TRUMP, especially if you don’t know much about cryptocurrencies. But if you’re just having fun with a small amount, that’s okay — just don’t expect it to be a guaranteed way to make money.”

Remember, investing in cryptocurrency or meme coins is especially risky. If you’re not sure whether it’s a good idea, speak with a finance professional before making any investments.

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This article originally appeared on GOBankingRates.com: I Asked ChatGPT To Explain TRUMP Crypto to Me Like I’m 12: Here’s What It Said

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