The cryptocurrency world saw another episode of high volatility as the Trump and Melania memecoins, once hailed as promising newcomers, experienced significant price drops. At the time of writing, the Trump Token (TRUMP) is currently trading at $37, marking a decline of over 40% from its all-time high of $77. Similarly, the Melania Token (MELANIA) has experienced a significant drop of 70%, now trading at $3. These sharp declines come amid a wave of profit-taking by early investors and increasing uncertainty in the broader cryptocurrency market.
The rise and sudden decline
The TRUMP memecoin, launched amid much fanfare ahead of Donald Trump’s second-term inauguration, initially captured attention for its rapid price surge. It surged significantly within two days, generating over $24 billion in trading volume and positioning itself as a potential leader in the altcoin space. The Melania token followed suit, benefiting from the shared hype.
However, Monday’s inauguration failed to meet investor expectations. While Trump signed multiple executive orders, none addressed digital assets—a major letdown for those banking on his pro-crypto stance during the 2024 election campaign. This absence of immediate support for blockchain or cryptocurrencies led to waning confidence among bulls who had anticipated policy clarity.
Read also: Trump’s ‘America-first’ crypto reserve: What happens to bitcoin?
Profit-taking and Broader Market Weakness
The sharp declines were largely driven by profit-taking, a common occurrence following the initial hype of memecoins. Early buyers, including whales, seized the opportunity to cash in on gains, leaving the tokens vulnerable to sell-offs. Broader market conditions further compounded the issue, with liquidations exceeding $626 million in the past 24 hours across the crypto market.
Bitcoin, often considered the crypto market’s anchor, is also facing headwinds and down by 2.5% in the past 24 hours. Altcoins like ETH and DOGE dropped even further, by 4.8% and 7.3%, in the past 7 days. This widespread downturn painted a grim picture for investors looking for stability.
Read also: Memecoins poised for continued growth in 2025—Messari
The Role of ETFs and Market Evolution
Interestingly, despite the early setbacks, a new development may breathe life into the TRUMP token. A prospectus filed with the U.S. Securities and Exchange Commission (SEC) proposes a TRUMP token ETF, alongside established assets like bitcoin and Ether. If approved, this could potentially stabilize the token’s market by attracting institutional investors.
The proposal, however, faces scrutiny. Critics question the liquidity and viability of TRUMP derivatives in a nascent market. The filing outlines a strategy to mix TRUMP exposure with safer assets like U.S. Treasuries, but concerns remain about its speculative nature.
Read also: Bitcoin ETFs: A game-changer for crypto adoption or just a flash in the pan?
Lessons from the Crash
The crash of Trump and Melania memecoins shows the inherent volatility of meme tokens. While they offer quick returns for early adopters, their lack of fundamental value often leads to dramatic price swings. The episode also highlights the importance of clear policies and trust in driving long-term growth in the crypto sector.
Blockchain security firm Blockaid reported a spike in malicious activity tied to Trump-themed tokens. These scams, including impersonator decentralized applications (dApps), increased by 206%, further eroding trust in the memecoin market. Experts have highlighted this as a growing challenge, reflecting the risks inherent in the speculative side of the crypto economy.
While the Trump tokens’ performance serves as a cautionary tale, it also illustrates the growing intersection of popular culture and blockchain technology—a space that remains unpredictable yet full of potential.
Investors are advised to approach such assets with caution, keeping an eye on regulatory developments and broader market trends. Whether this marks the start of a new era for memecoins or a fleeting experiment, the crypto market continues to test its boundaries in the pursuit of innovation.
Read more: $TRUMP: US President-elect Trump launches meme coin as price skyrocket.
Image credit: Anna Moneymaker/Getty Images
Victor Solomon is a crypto analyst at Crypto Asset Buyer (CAB). Over the years, Victor has gained valuable expertise in market analysis, risk management, and community management within the cryptocurrency ecosystem. The founder of Soluvic Crypto Hub, a crypto community where he equips newbies in the space, Victor’s mission is to empower individuals to uncover opportunities and safely navigate risks in the blockchain industry. Victor’s academic foundation includes a BSc. (Ed) in Mathematics, a credential that underpins his strong analytical and problem-solving abilities. Currently, he is expanding his technical expertise as a Software Development student at Brigham Young University. He is an Ex African Manager of Newscrypto.
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