Insight: The market impact of TRUMP and MELANIA memecoins

January 23, 2025

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The launch of the TRUMP and MELANIA memecoins by Donald Trump and his circle has caused a seismic shift in the cryptocurrency market. Within days, these tokens attracted global attention and reached staggering valuations. Here’s an analysis of the impact these events had on on-chain activity and the broader effects on the cryptocurrency industry.

Event Timeline

On January 17, 2025, Donald Trump officially announced the launch of the TRUMP memecoin via posts on Truth Social and X (formerly Twitter). The dedicated website bore the slogan: “Join the Trump community. History is in the making!”, allowing investors to purchase the memecoin directly via credit card or through the contract deployed on Solana.

Here are the key milestones of the events:

December 21, 2024: The domain name “gettrumpmemes.com” is purchased.
January 17, 2025 (around 10 a.m. ET): The liquidity pool is deployed on decentralized exchanges. The fully diluted valuation (FDV) of TRUMP is estimated at approximately $700,000.
A few minutes later, Donald Trump makes the official announcement on Truth Social, followed by a post on X about 45 minutes later.
January 18, 2025: The domain name “melaniameme.com” is purchased.
January 19, 2025: The TRUMP memecoin reaches an all-time high of $76, bringing its FDV to $76 billion.
Later that day, around 4 p.m. ET, the MELANIA token’s liquidity pool is deployed.
Approximately 40 minutes later, Melania Trump officially announces the launch of the MELANIA memecoin via her X account.
This announcement triggers a massive sell-off, leading to a sharp 46% drop in TRUMP's price within minutes.
January 20, 2025: The MELANIA token hits a record high of $13.6.

While the announcement of a memecoin by a former U.S. president stunned the market, TRUMP's initial success was meteoric. Within less than 48 hours, it ranked among the top 10 cryptocurrencies by FDV, enabling Donald Trump and his circle to generate estimated profits in the tens of billions of dollars.

Analysis suggests that the launch of the TRUMP memecoin was meticulously planned, as indicated by the domain name purchase in December 2024. In contrast, MELANIA’s launch appears more impulsive, with its domain name purchased just hours after TRUMP's success.

While TRUMP fits into a cultural narrative tied to crypto and the popularity of memecoins (Donald Trump having adopted a pro-crypto stance in recent months), MELANIA's launch seems more opportunistic, driven more by profit motives than genuine consideration for the market or investors.

→ Discover our analysis on memecoins and the memecoin supercycle thesis :

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TRUMP’s On-Chain Impact

The launches of the TRUMP and MELANIA memecoins had significant effects on on-chain metrics, particularly on the Solana network. First, the Total Value Locked (TVL) on Solana rose from $11.1 billion (on January 17) to over $14.2 billion (on January 19). This represents a 27.9% increase, attributable both to a 19.5% rise in SOL’s price during the period and net capital inflows of approximately $164 million into Solana over the past seven days.

Regarding user activity, the number of active addresses on Solana increased from 6.6 million the day before TRUMP's launch to over 8.1 million the following day, marking a 23% rise. Additionally, trading volumes on DEXs skyrocketed from $4.5 billion to nearly $36 billion on the launch day. The main beneficiaries of this growth were Meteora and Raydium.

In the four days following TRUMP’s launch, DEXs within the ecosystem processed a total trading volume of $96.5 billion. TRUMP accounted for 31.6% of this total. MELANIA’s launch further amplified this trend, driving an additional 38.9% increase in total volumes, with TRUMP contributing 27.4% and MELANIA 3.5%.

However, the total number of transactions on Solana dropped by 22% on January 18, from 66.7 million to 51.8 million. This phenomenon is likely due to network congestion, as many users faced difficulties executing transactions. This is corroborated by a significant increase in “tips” paid to validators, indicating users’ willingness to pay more to prioritize their transactions in saturated blocks.

Broader Industry Impact

The launch of the TRUMP and MELANIA memecoins had far-reaching implications beyond on-chain activity. These events significantly influenced short-term adoption and public perception while raising concerns about their long-term impact on the cryptocurrency sector.

The buzz generated by Donald Trump’s memecoin drew an audience far beyond the traditional crypto community. Google searches for “Buy crypto” surged to levels not seen since 2021. In France, searches for “Acheter crypto” even exceeded previous records.

While this hype sparked genuine interest in the sector among novice investors, the fact that their entry point was a memecoin launched by a former U.S. president might not be ideal. It risks reinforcing the perception that cryptocurrencies are primarily speculative and discourages newcomers from understanding Bitcoin's true value.

On the other hand, Donald Trump’s direct involvement in launching a memecoin sends a mixed message. While his pro-crypto stance is evident, the TRUMP (and MELANIA) launch reduces the industry's image to that of a speculative casino.

The media attention surrounding these launches could also inspire other public figures to follow suit. Beyond the intrinsic lack of utility in such initiatives, this trend could draw the scrutiny of regulators. If new restrictions were imposed, they could affect not only the memecoin market but also hinder the growth of more legitimate sectors within the industry.

Lastly, these events perpetuate misconceptions equating Bitcoin with other cryptocurrencies. Critics already use the TRUMP and MELANIA memecoins as arguments to discredit the entire crypto sector, claiming that digital assets lack seriousness and primarily fuel speculative bubbles. This could tarnish Bitcoin’s reputation, even though its investment thesis remains unchanged, as it is continuously grouped with opportunistic and frivolous projects.

Conclusion

The TRUMP and MELANIA memecoins are emblematic of the ever-evolving dynamics of the cryptocurrency market. While they have brought unprecedented attention and activity to the sector, they also raise important questions about the industry's future and its perception by the broader public. These events highlight the delicate balance between fostering innovation and managing speculative excesses, a challenge the crypto space will need to navigate carefully in the years ahead.