To anyone following the cryptocurrency market as of late, TRX has been making big waves with it’s astronomical price climb, hysteria causing purchasing in Asian markets, and overall marketcap increase. For more information on the project as a whole, please see my previous article on TRX.

With that being said, the internet rumor-mill has been astir with a whirlwind of Fear, Uncertainty & Doubt (FUD) surrounding TRX and it’s recent rise to fame. Many posts began popping up that have since been locked and deleted due to the unverifiable nature of their claims.

The original post that began spreading (Since deleted)

The primary accusation was paraphrased to say that Justin Sun was secretly liquidating over 6 billion TRX through various exchange methods. The secondary accusation stated that not only was the CEO and lauded “Superstar” in Asia utilizing his fame to pump and dump his own product, but that he was doing so with previously mentioned “Lockup” funds that were not able to be moved until 2020. This was a very serious accusation to say the least.

Upon further investigation, however, we were able to find factual evidence that this was not the case. To start, let’s begin from the source himself, Justin Sun, and delve deeper.

The main controversy surrounded accusations of liquidation of TRX currency. However, if you look at the original wallet setup for the lockup, as mentioned in the TRX Whitepaper, you will find that the amounts remain untouched since their inception. This alone immediately contradicts the accusations that gained such notoriety within Reddit.

The original Founder’s Lockup via Etherscan

But at what reasoning would someone so publicly doubt and accuse TRX of being an exaggerated pump and dump of epic proportions? Many reasons come to mind, however the most major factor in my mind is the fear of missing out, or rather, fear of already having missed out. With the current state of the cryptocurrency market it can be very time demanding (as well as expensive) to keep up to date on each and every new project, while also investing within them as you see fit. Many people begin to feel left out of the train of success of a specific token or investment, and turn to negativity to justify their own non-investment, or to further cause a dip in price to allow for a more achievable price point entry.

Reddit, while sometimes a good source of general information on project updates, can be at times extremely biased towards a few main projects, be it whatever is currently popular within those subreddits. While you will find each subreddit is moderated with differing methods and demeanor, censorship does in fact happen at a political, financial and emotional level across many boards.

Secondly, many Whales, or rather investors holding significant amounts of currency (enough to sway exchange markets) are aware of an increase in Fear, Uncertainty & Doubt, and manipulate this to their advantage. Many times this is referred to as a Shakeout. An investor may want to accumulate a large portion of currency in a token that has previously trended strongly. They accomplish this by placing buy orders in the pool to chase the token up significantly higher. The biggest factor utilized is buying into weakness. New token investors may lack the traditional financial market skills to track a tokens past and present status. A Whale can then start a trend, and monopolize off of it to further increase their holdings.

While a shakeout can occur to simply exit the market, many times it is monopolized upon to transfer the token holdings of weak hands, to the stronger, larger investors for a larger return.