Trump Memecoin Plummets 8% as Crypto Market Sells Off
Market Volatility and the Impact on Trump-Related Memecoins
In the early hours of Monday morning, the TRUMP memecoin, associated with former President Donald Trump, experienced a significant drop of approximately 8%. This decline occurred during a period of heightened market volatility, which led to widespread liquidations across various financial instruments. The value of Trump’s paper stake in the coin was reduced by roughly $50 million as a result of this sharp decline.
The price movement of $TRUMP was particularly dramatic, falling by about 8% within a five-minute window around 2 am ET. This was accompanied by a surge in trading activity, with the crypto data provider CoinMarketCap reporting that the memecoin’s 24-hour trading volume increased by $98 million. The drop in value also affected Melania Trump’s own memecoin, $MELANIA, which reached an all-time low of $0.1642 on Monday, according to the same data source.
This downturn came amid what analysts described as the largest selloff of long positions this year. Major cryptocurrencies such as Bitcoin, Ethereum, and Solana also saw significant declines during the early morning hours. However, both $TRUMP and $MELANIA showed slight recoveries by Tuesday afternoon, with $TRUMP trading at $7.5838 and $MELANIA at $0.17.
Broader Market Trends and Analyst Insights
A market analyst from Nansen, Nicolai Søndergaard, noted that the decline in the value of the Trump family’s tokens was part of a broader trend. He explained that the market witnessed one of the largest long liquidations of the year, leading to increased price volatility and sharp drops across multiple tokens. According to Søndergaard, the decline in the value of these memecoins was not an isolated event but rather a result of investors unwinding their positions after extended periods of holding.
Background on Trump Memecoins
Meme coins are typically based on internet culture, humor, or viral trends. Trump launched his memecoin shortly before taking office, with CIC Digital, a company wholly owned by Trump, and another entity named Fight Fight Fight retaining ownership of 80% of the coins. These coins are scheduled to be released over the next three years. Additionally, the companies involved generate revenue from trading activity, meaning that even as the price of the coin fluctuates, Trump can still benefit from transaction fees.
Melania Trump also launched her own memecoin, $MELANIA, two days after her husband. While less is known about the business structure of $MELANIA, its website states that it is the intellectual property of MKT World, LLC, with Melania listed as both manager and member of the company.
Regulatory Concerns and Political Criticism
Recent developments have drawn attention from lawmakers, who are calling for greater oversight of Trump-related crypto ventures. Sen. Jeff Merkley and Rep. Sean Casten urged the Securities and Exchange Commission (SEC) to exercise “full oversight” over Chinese billionaire Justin Sun, a major backer of Trump’s memecoin and other crypto projects. They highlighted that Sun’s investments in the token had yielded little personal return but had generated an estimated $400 million for the Trump family.
In May, Merkley introduced the End Crypto Corruption Act, which aims to prevent senior officials, including the president, from issuing, endorsing, or sponsoring crypto assets. The bill has 25 co-sponsors, including Democrats and Independent Bernie Sanders.
Exemptions and Legal Considerations
It is worth noting that the president and vice president are generally exempt from most federal conflict of interest laws, which has raised concerns among critics about potential conflicts of interest related to their involvement in cryptocurrency ventures.
Additional Crypto Ventures
Trump’s other crypto ventures have also faced challenges. The $WLFI token, associated with World Liberty Financial, declined by about 4.5% around 2 am Monday and dropped further by 10.6% by Tuesday afternoon. Unlike traditional cryptocurrencies, $WLFI is not backed by any underlying assets and does not confer ownership in the company. Instead, it allows holders to propose and vote on rule changes for the protocol.
World Liberty Financial was created with 100 billion $WLFI tokens, of which 22.5 billion were allocated to DT Marks DEFI LLC. Trump owns 70% of this company, while his family members hold the remaining shares. DT Marks DEFI LLC, in turn, owns about 38% of World Liberty Financial and receives 75% of the proceeds from token sales after certain deductions.
Conclusion
The recent fluctuations in the value of Trump-related memecoins highlight the volatile nature of the cryptocurrency market and the complex interplay between political figures and financial instruments. As these digital assets continue to evolve, they remain under close scrutiny from both the public and regulatory bodies.
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Disclaimer:
This article is for informational and entertainment purposes only and does not constitute financial advice. Always do your own research (DYOR) before making any investment decisions, your money, your call. Crypto’s wild, so stay sharp out there!
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