Tron and BitTorrent’s $1 billion hype-fuelled pump and dump

Traders who bought the rumour and sold the news of Justin Sun’s May 26 teaser tweet could have effectively participated in an epic pump and dump for the TRX and BTT digital tokens.

Following the so-called master marketer’s tweet, Tron immediately saw its market cap rise from $1.8 billion to $2.6 billion, with BitTorrent also seeing $200 million worth of gains. However, both projects have since seen $600 million and $100 million wiped off their respective valuations over the last few weeks.

The news ended up being the announcement that Tron founder Justin Sun won a $4.5 million bid to have lunch with billionaire investor Warren Buffett.

When analysed by research-focused company the TIE, the news that “something huge is going to happen to TRON and BitTorrent” sent TRX trading sentiment skyrocketing and caused a price jump of 51% within a week in anticipation of what may be revealed.

The spike in sentiment corresponded with a massive increase in Twitter conversations around Tron. Within one day, conversations around TRX tripled on the platform famous for spreading news fast.

The TIE noted that “BitTorrent behaves similarly to TRON. Immediately proceeding Justin’s tweet, BTT sees a massive spike in sentiment, which is followed by a 54% increase in price over two days.” BitTorrent tweet volumes also exhibited a similar pattern to Tron’s by spiking more than 400%.

The news goes live

Despite a small jump in price for Tron following the official luncheon announcement on June 3, sentiment immediately turned negative as the market was clearly underwhelmed by the news. Within 24 hours, the price of Tron had dropped 17%.

Again, BitTorrent behaved similarly to Tron, with sentiment immediately turning negative following the announcement. Price dropped 46% within days to a low of $.00113. This is 5% lower than it was prior to the May 26 tweet.

When looking into social media traffic, The TIE found that “tweets on BTT also double. Most of the conversations are negative, causing sentiment and subsequently the price of BitTorrent to crash.”

The analytics firm concluded: “While Twitter hype and pumps are not as common now as they were during the ICO boom of 2017, crypto remains the most sentiment-driven asset class. In crypto, news breaks on Twitter, and the crowd’s reaction causes massive swings in price.”

This tale confirms that hype, speculation, and traders can move markets, with Twitter analytics providing key insights when looking for tops, bottoms, and trend reversals in large-cap crypto assets that have a large, community-based ecosystem that is always pushing for wider adoption.

In summary, the collective valuation for both Tron and BitTorrent are up nearly $300 million based on the eventual announcement of the founder’s lunch with a man who has been ever-present on the Forbes global rich list for the last three decades.

Time will tell what actual value (if any) will come from the meeting, but I have a feeling this may not be the last opportunity to make a trade on Justin Sun’s hype-based approach to creating a community for his decentralised tokens.

For more news, guides, and cryptocurrency analysis, click here.