Trump tokens take off

We always knew Donald Trump was going to be pro-crypto but maybe not this much. The incoming US President has launched his own memecoin $TRUMP, which peaked at a valuation of more than $15 billion over the weekend.

If that wasn’t surprising enough, his wife Melania went and launched her own memecoin—$MELANIA—which quickly gained a market cap of $6 billion. All hours before Trump is sworn in as 47th President.

Memecoins lack intrinsic value and are extremely volatile investments, normally launched off the back of a viral meme. There have been numerous cases of “pump and dump” and “rug pull” tactics that leave investors with worthless tokens.

Will the Trump memecoins be different? Opinion is divided over the launch of the memecoins and the timings by Trump, who was previously anti-crypto before making a U-turn last year.

$TRUMP was co-ordinated by CIC Digital LLC, an affiliate of the Trump Organization, which has previously sold Trump-branded shoes and fragrances. CIC Digital LLC and Fight Fight Fight LLC, a company formed in Delaware earlier this month, own 80% of the tokens. 

About 200 million of the digital tokens have been issued and another 800 million will be released in the next three years, the coin's website said. 

It did include a disclaimer that the coin is "not intended to be, or the subject of" an investment opportunity or a security and was "not political and has nothing to do with" any political campaign, political office or government agency.

One clear winner in the situation is crypto company Solana, as $TRUMP and $MELANIA was created using its blockchain technology. Its price rose by 12% at its peak, hitting an all-time high, although this is nothing like the 300% plus increase $TRUMP has rocketed by.

Trump has said he would use his executive powers to reduce regulatory burdens facing crypto firms, including the formation of a new crypto advisory council.

'Insane'

Social media was abuzz with comments about the memecoins, with many debating the ethics of the in-coming US president launching such volatile tokens. One commentator called it “insane”.

There was also an effect on the wider crypto market with Bitcoin and other digital currencies initially falling. Investors had been selling their existing crypto assets to buy $TRUMP instead. However, Bitcoin soon recovered and hit an all-time high, rising more than 7% at the time of writing.

As the dust settles on what has been a very surprising move in the world of crypto, one question is whether this is good or bad for crypto?

Memecoins are designed to be fun, and a risky way to make money. They encourage short-term thinking and risk-taking.

At The Crypto Radio our mission is to highlight the long-term viability of crypto as the future of money, a store of wealth and new form of payment. In other words, its utility and real-world uses. Memecoins are the complete opposite.