The new President of the United States, Donald Trump, had generally positive promises for the cryptocurrency market during his campaign. Therefore, Donald Trump’s impending presidency is considered a significant development for many Bitcoin and altcoin investors. In response to these expectations, just days before taking the presidential chair, Donald Trump introduced his own meme coin, OFFICIAL TRUMP.
First, he announced it on his social media platform, Truth Social, and 45 minutes later, he shared posts introducing his meme coin, Trump, on his Twitter account. This meme coin, launched on the Solana network, immediately captured a huge amount of hype and, at the time this article was written, ranks 16th in market capitalization.
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Is Trump’s launch of a meme coin a positive or negative development for the cryptocurrency market?
As of the writing of this article, the OFFICIAL TRUMP coin, having surpassed a market cap of $13 billion, has divided investors. Some Bitcoin and altcoin investors are concerned that Donald Trump might prioritize his personal interests over the market’s, focusing on issues like privacy, data security, and decentralization, which are of extraordinary importance to the market, instead using the market as a tool for his own goals.
However, many investors support Trump’s move, arguing that he has opened doors for altcoins, secured long-term political and regulatory support, and by leveraging the market’s popularity, has brought many new investors into the sector.
Advantages of Trump Coin for the Market
The most significant advantage of Donald Trump launching his personal meme coin is certainly related to regulations. By introducing his own coin, Trump is signaling that he will back the cryptocurrency market throughout his five-year term as president.
This political support is of great importance for the crypto sector, which has been struggling with trust issues and biases for years. We can say that a new era awaits crypto projects in terms of making new technological investments, increasing collaboration with the real sector, and expanding new use cases.
Moreover, the popularity of the cryptocurrency market has also increased. There was a negative relationship between crypto investors and the SEC Chairman Gary Gensler, which kept new investors at bay and allowed experienced investors to buy many altcoins at the bottom. However, for these investments to achieve their goals and for the market to grow and develop into a better place, it’s crucial for new investors to enter the market. However, it’s very important that these new investors do not fall into FOMO (Fear Of Missing Out) and act wisely.
Additionally, it’s worth noting that TRUMP coin has seen a significant rise (priced at $69 at the time of writing this article) and has made a lot of money for many investors. It continues to offer earnings to investors trading both spot and futures on platforms like Binance, while also negatively impacting the liquidity of other altcoins. However, today’s $5 million ETH purchase by Trump’s family’s DeFi project, World Liberty Financial, supports theories to the contrary.
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Disadvantages of Trump Coin for the Market
Just as there are advantages, there are also several disadvantages to Trump Coin in the market. First and foremost, with its entry, almost all major altcoins except Solana have experienced a decline. This situation points to a bigger problem for many investors than the observed decline. The expectation in the altcoin bull market was for money to flow into more major coins, which could lead to many altcoins performing below expectations.
However, in the long term, the technological development of the market, the increase in real sector collaborations, the expansion of use cases, ETFs, and institutional investments could reverse this issue, leading to the failure of low-quality projects and the domination of high-quality ones.
Another disadvantage is that many celebrities and corporations launching their own meme coins could divert funds away from quality projects, significantly impacting the core investor base of cryptocurrencies. While everyone chases after 10x, 100x, or 1000x returns with meme coins, the lack of investment in coins like Ethereum, Hedera, and Arbitrum could be problematic.
Another issue is that a significant portion of the supply is still held in Trump’s wallet. There’s a concern in the market about this. This concern stems not only from the possibility of Trump pulling a rug pull but also from the potential for Trump to manipulate the market for personal gain. This fuels speculation that Trump might take steps that align with U.S. interests but go against the essence of the crypto market.
There’s also an ethical disadvantage. How ethical is it for a U.S. President to use his position to make hundreds of millions of dollars in just a few days and significantly increase his wealth? While the answer to this question varies from person to person, there are reactions in the market regarding this issue.
How high can TRUMP coin go?
The question “How high can TRUMP coin go?” will entirely depend on Donald Trump’s actions. Currently, 80% of the TRUMP coin supply is held in a wallet believed to belong to Trump. While this could be seen as poor tokenomics, Trump might not want to undermine the trust in him by doing anything that would harm investors.
If Donald Trump starts selling his coins, depending on the amount and strategy of the sale, we could observe significant declines. Conversely, if he decides to invest in his coin, TRUMP could become the star of the altcoin bull run. This makes predicting the coin’s future quite unpredictable.
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