The Official Trump cryptocurrency, known as $TRUMP, fell sharply, bringing forth the inherent nature of meme-based digital assets-they are risky.
The Official Trump cryptocurrency, $TRUMP, has had a rather dismal market performance this week, further emphasizing the meme-based digital currencies’ volatile nature. On January 17, 2025, when $TRUMP was launched, its value reached a high of $75 per token on January 19, with a market valuation of almost $10 billion.
But this excitement could not last for long. The token’s value had declined by almost half on January 21 and was selling at about $38 per coin. As of January 25, the value of $TRUMP was about $29, moving downward.
Several factors have contributed to this decline:
Market Saturation: Another competing token, $MELANIA, was launched by First Lady Melania Trump on January 19, thereby adding to the niche market of Trump-themed cryptocurrencies. Like the former, $MELANIA too had a drastic drop from $13 to $4.7 soon after its release.
Regulatory Developments: The SEC formed a “crypto task force” to develop a regulatory framework for digital assets. Intended to protect investors and encourage innovation, the development has been somewhat uncertain and is partly responsible for market volatility.
Ethical and Legal Concerns: The fact that a sitting president was involved in the promotion of a cryptocurrency and stands to benefit financially has brought forth ethical concerns. Critics say such action can create a conflict of interest and could violate the constitutional provision against emoluments.
The sharp rise and subsequent fall of $TRUMP is evidence of the speculative nature of meme coins, which often hold little intrinsic value and are very sensitive to sentiment on social media. Industry experts caution investors about the high risks associated with these assets.Amanda He, Chief Investment Officer at ChainUp Investment, noted, “While these tokens generate considerable buzz and trading activity, it’s crucial to recognize that they are often fueled by social media sentiment rather than solid fundamentals.”
As the cryptocurrency landscape continues to evolve, the case of $TRUMP serves as a reminder of the importance of due diligence and the potential pitfalls of investing in highly speculative assets.
