Donald Trump's meme coin, known as Official Trump (TRUMP), unexpectedly reached a market cap of $14.5 billion, capturing attention, although its market impact was minimal.
Rapid Growth in Market Capitalization
The TRUMP meme coin's market temporarily exceeded $14.5 billion, drawing attention from supporters. However, significant changes in the cryptocurrency market did not occur. Harrison Yang, the founder of the gaming Web3 studio Mirai Labs, noted that most discussions remained at a conversational level. Only a small portion of capital came from new investors, largely consisting of hot money moving within the market.
Potential Benefits and Challenges
Chainalysis research indicated that about 50% of TRUMP investors bought blockchain assets for the first time on the day they purchased the meme coin. This highlights the unique appeal of the meme coin, attracting new participants but not guaranteeing long-term profitability. As of January 19, TRUMP's price peaked at $73.43 but soon fell to $26, dropping 11% in the last 24 hours. The market cap decreased to $5.2 billion, while the fully diluted valuation, considering locked-up coins, amounts to approximately $26 billion.
Ethical Questions and Consequences
Trump's launch of the meme coin before taking office raised ethical concerns among experts. The U.S. Congress highlighted potential conflicts of interest related to the president's crypto projects, including World Liberty Financial.
Despite its brief surge in value, the TRUMP meme coin faced widespread critique due to potential ethical violations. Most investors are either breaking even or suffering losses.
