Donald Trump’s memecoin spikes ahead of inauguration The Block
Amid the furore around TikTok that’s dominated headlines around the world in the last few days, you might be forgiven for having missed the launch of a new memecoin. Announced on Donald Trump’s Truth Social late Friday, $TRUMP is described as a coin that celebrates the Republican’s presidential election win.
The coin rose in value by 300% in its first 24 hours, and caused other coins to fall in value as investors piled in. The near-parallel launch of the $MELANIA coin by Trump’s wife over the weekend caused the price of $TRUMP to dip momentarily. Yet on Sunday morning, $TRUMP had hit a market cap of $5.8 billion.
The coin is built on Solana’s blockchain platform, and launched with a supply of 200 million coins. Supply is set to rise to 1 billion over the next three years.
Yet some analysts urge caution. Nigel Green, CEO of deVere Group, said: “This is a revival of the meme coin trend we saw in 2021 and 2022, where many young, inexperienced investors got burned by extreme volatility,” he said. “Investors will get burned by this frenzy too.”
Green said that while the lure of quick profits may tempt some, investment in memecoins is high-risk and, therefore, serious speculators should beware. “Let’s be very clear: this is more gambling than investing. If you’re considering getting involved, you need to have a sound, diversified, long-term plan in place first,” he said.
Industry watchers will recall Dogecoin, which spiked in value after promotion on the then-Twitter by Elon Musk. Investors in $TRUMP are subject to the same hype. Green says, “They’re mostly not buying because they think the coin has inherent value: They’re buying because they hope others will drive the price higher, allowing them to sell at a profit.”
“Understand the real risks to your money. This is not the same as investing in sound assets. Gambling is not the same as investing,” he said.
Adding further ructions to the market values of cryptocurrencies in the last 72 hours, Melania Trump posted on Twitter: “Official Melania Meme is live! You can buy $MELANIA now.” Market capitalisation of the coin reached $13bn over the weekend, and is thought to have even temporarily sucked some value from $TRUMP.
Posting on Twitter, The Kobeissi Letter said, “Less than 48 hours ago, Donald Trump launched $trump which just erased $7.5bn in market cap in 10 minutes. In the minutes around the launch of Melania Trump’s token, we saw massive sell orders in $trump.”
The incoming Trump administration’s attitude to cryptocurrencies has helped investor confidence in recent months, with the value of Bitcoin reaching over $100,000.
“Trump’s presidency is expected to usher in an era of pro-crypto policies,” Nigel Green said. “While this could pave the way for legitimate growth for established assets like Bitcoin, it also raises questions about the risks of speculative trading driven by social media hype.”
A more recent memecoin phenomenon is the coin launched by “Hawk Tuah girl” which lost 95% of its value soon after release, dropping to a market cop of $25 million from $500 million. The Trump coin’s sudden rise in value may have been fuelled by investors expressing their political support for the new POTUS, who is to be inaugurated today.
Image source: “Pirate’s Gold” by Mykl Roventine is licensed under CC BY-NC-SA 2.0.
See also: MANTRA and DAMAC collaborate to tokenise $1 billion in Middle East
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