What the Trump meme coin means for the crypto space
This January, the crypto waters were stirred by an unexpected and unprecedented event: the launch of $TRUMP, President-elect Donald Trump’s official cryptocurrency. Shortly after, incoming first lady Melania Trump announced the arrival of her own meme coin, named $MELANIA. Released just three days ahead of Trump’s inauguration as the forty-seventh President of the United States, the Trump meme coin has raised eyebrows and created controversies among industry experts, members of the crypto community, and the general public.
The $Trump coin price went on a rally and increased by 300% within just a few hours of launch, outperforming established cryptocurrencies like Bitcoin and Ethereum. Riding on the wave of hype and enthusiasm, the asset continued to register gains, rising to a record high of $75.35 before slowing down and slumping to a current trade price of $15.38.
However, more important than the intense price action and the frenzy surrounding the two meme coins are the implications they might have for the crypto market. The Trump family’s entry into the crypto realm is bound to have a notable impact on the evolution of the industry and all the assets in the market, so experts are trying to predict.
Trump coin at a glance
Before we go into the potential effects that $TRUMP might have on the market, we have to understand what kind of cryptocurrency we’re dealing with. The Trump coin presents itself as a meme coin – a specific type of crypto token inspired by internet memes and pop culture symbols. Meme coin’s value relies more on community engagement rather than real-world utility, which makes them much more volatile than other digital currencies.
The branding of the Trump token includes an image of the President with his fist pumped in the air following the assassination attempt on July 13 and the tagline “Fight, Fight, Fight,” which he appeared to say after being shot at.
From a technical perspective, the Trump coin is hosted by the Solana blockchain and was designed with a supply cap of 1 billion. The project was developed by two Trump-affiliated entities, CIC Digital LLC and Fight Fight Fight LLC, which collectively own 80% of the token’s supply, scheduled to be progressively released into circulation over the next three years. The remaining 20% of the assets have already been issued and are available for trade.
Potential impact on the crypto market
Both TRUMP and MELANIA tokens followed the classical trajectory of meme coins: we’ve witnessed the assets experience a meteoric rise, most likely driven by the initial hype, only to see them plummet once the enthusiasm subsided. The sudden spike and sharp decline in the coins’ value highlighted the volatile nature of meme coins and provided a reminder of the risks that these types of tokens pose.
Although the official website of the TRUMP coin includes a disclaimer stating that the token was not devised as an investment mechanism or a security, this hasn’t stopped investors from jumping on board and trying to make a profit by investing early in the coin. For some of them, this strategy paid off, with reports revealing that at least fifty of the largest investors registered individual gains of over $10 million.
On the other hand, those less fortunate lost the money they invested as the coin’s value slumped considerably. Reports estimate that investors have experienced significant losses, with some suggesting figures as high as $2 billion. However, these claims remain debated within the industry.
Regardless of how much investors have accumulated or squandered on the Trump token during its short time in the market, the fact remains that Trump’s meme coin project has put the spotlight on the crypto industry. To some, this launch shows Trump’s commitment to crypto as he has become increasingly fond of digital currencies in recent months. The President has made numerous remarks in favor of crypto and even stated his intentions of making America the crypto capital of the planet.
Certain critics say that Trump’s foray into the crypto space might spell bad news for the development of the industry as it could detract attention from the purpose and value that digital currencies provide and the real issues at hand.
At the same time, the advent of the Trump coin could announce major changes in terms of crypto regulations, marking the end of the crackdown that digital currencies were subjected to during the previous administration and the beginning of a new crypto-friendly era under President Trump. These projections are also backed by the appointment of prominent crypto supporters in key administrative roles, which could lead to a more favorable regulatory environment for cryptocurrencies in the current administration.
The intersection of politics and crypto
A major point of concern is represented by the involvement of political figures in the crypto space. Although the site for Trump’s meme coin mentions that the token doesn’t have any associations with politics, it’s highly unlikely that the timing of the launch was accidental. Besides, the only reason why the token received so much attention in the first place is because of Trump’s persona and the policies he’s promoting.
On top of that, the arrival of $TRUMP created a precedent that might encourage other political figures to follow suit and craft their own cryptocurrencies in the future. If that should happen, the crypto space could turn into a political battleground, and that could further disrupt the already volatile crypto environment.
Ultimately, the TRUMP and MELANIA coins could bring both advantages and disadvantages to the crypto industry as they might signal the beginning of a new era of prosperity for digital currencies but also underscore the risk associated with this asset class. The only thing that’s clear here is that the political influence on crypto is getting stronger and could have far-reaching consequences for all market players.
