Memecoin Mania ~ Trump Enters the Arena

Memecoins had an interesting weekend as the now-current President of the United States, Donald Trump, launched his own memecoin just two days prior to his inauguration.

Is this going to be one of the greatest moves of all time by a man with that much power, or will it hurt the overall market by drawing people into the crypto space for the wrong reasons?

Let’s talk about it…

$TRUMP Mania

Donald Trump and his team launched a memecoin this past weekend, announcing it to his Twitter followers on January 17th at 9:44 PM by sharing the contract address (CA). Following his tweet, the price of the memecoin skyrocketed as more people learned about the news, reaching a peak of $82.7 per $TRUMP.

This surge in popularity drove the market capitalization (market cap = circulating supply × price) of $TRUMP to a staggering peak of $12.7 billion—higher than companies like U-Haul, W.P. Carey, Subaru, and many others.

If we take the Fully Diluted Value (FDV), which is calculated as total supply × price, the market cap reached an eye-popping $88 billion—surpassing even a company like Target.

The Tokenomics

There are currently 200 million tokens in circulation, with a total supply of 1 billion tokens. Currently, 80% of the supply is being held by a single wallet, which is belongs to the team behind the launch. The team is suspected to be CIC Digital LLC, the same group responsible for Trump’s NFT drop three years ago.

The vesting period for this surprise drop is 36 months, meaning the wallet holding 80% of the supply can gradually sell its holdings over that period, starting 3 months from now when they first begin to unlock. In my opinion, this type of vesting period may seem appealing at first glance but is often used in the crypto space to sell holdings over time for a profit.

As I’ve mentioned before, memecoins are driven by narrative and story. If $TRUMP performs well, his team will get paid more via the memecoin over time. While more details may emerge later, there is currently no discussion about utilities for this coin for holders

Memecoins - Narratives and Valuations

We live in a world driven by stories. From tulips in the 1700s to AI and memecoins in the 2020s, humans are always chasing the next big narrative. Today, with the internet, narratives are crafted faster than ever—often shaping events rather than following them.

Memecoins epitomize this. Their value isn’t tied to use cases, P/E ratios, or cash flows, but solely to their narrative. Without utility or intrinsic value, memecoins are entirely speculative, with their success hinging on whether a story resonates and gains traction.

Take $TRUMP, for example. Its narrative thrives on its association with a globally polarizing figure, making it emotionally and culturally charged. This gives it a strong initial appeal, but also highlights its vulnerability—like all memecoins, its value will collapse once the narrative fades. Ultimately, memecoins are probabilistic bets on the lifespan of a story, not on fundamentals.

The Crypto Outflow

With this surprise drop, President Trump tweeted at 9:44 PM, which triggered an outflow of liquidity from other crypto markets into Solana —the cryptocurrency most commonly used to buy or swap for memecoins.

Below, I’ve attached two charts for comparison:

1. The first chart showcases the total market cap of all altcoins (including ETH).

2. The second chart showcases Solana’s price action, highlighting the inflow of liquidity into that market around the time of the tweet.

I find this type of price action more bearish than bullish, as we’re seeing a net outflow from most other cryptocurrencies and an inflow into a cryptocurrency being propped up by the narratives surrounding memecoins, that is clearly a zero-sum game, where the majority of participants tend to lose in the long run.

This outflow also highlights how thin liquidity currently is in the markets, with many major altcoins and BTC dropping following the initial $TRUMP drop.

Conclusion

I remain bullish on crypto technology, as I find extreme value in blockchain, particularly with major use cases in DeFi. However, I believe this current situation hurts the crypto markets in the short and mid-term rather than helps them.

It brings people into this space for the wrong reasons, with a gambling mindset...something I once had, which led to bad habits. This also further perpetuates the scammy reputation that many associate with the crypto space.

Solid Fudamentals do NOT = Higher Prices in the current Crypto space.

It will be interesting to see how this unfolds over the next few months. However, based on past trends, I don’t believe it will end well for prices in the short term, as narratives may shift if President Trump does not perform well early on, but only time will tell. I truly hope there are positives that come out from this.

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