As Donald Trump prepares to return to the White House, he has given one more reason for arguably his most ardent support base, the cryptocurrency community, to “have fun”.
The US president-elect on Friday apparently launched a memecoin, which rocketed in value within an hour and has only gone up since. The emergence and sudden rise of the Official Trump token, or $TRUMP, however, raised some questions.
What is a memecoin?
A memecoin is a cryptocurrency that is, by default, not intended to be taken seriously. Coinbase describes them as inspired by internet memes or trends, “typically supported by enthusiastic online communities … generally intended to be light-hearted and fun”.
And that is where the trouble lies: memecoins are typically characterised by their volatile tendencies. But, despite their inherent risk, memecoins have grabbed attention because of their potential for high returns and their “role in digital culture”, Coinbase said.
The most famous memecoin is Dogecoin, the token whose logo resembles a Japanese shiba inu and which was made famous by Tesla chief executive and Trump lieutenant Elon Musk.
There are more than 3,700 memecoins, according to CoinMarketCap – with some amusing names. Among the top performing memecoins are HarryPotterObamaSonic10Inu, Cat Girl, Jesus Coin, Pooh, Doge Eat Doge, Elon, Super Trump Coin and Maga, whose unit is “Trump”.
Then, of course, there's Official Trump.
Why were there sceptics?
The latest memecoin to stir interest in the crypto world was a relatively unknown token until Mr Trump posted a message promoting it on X and his Truth Social platform.
Some sceptics on social media alleged the post was the result of a hack, but no evidence to support that was found, and neither Mr Trump nor his team refuted the posts.
Additionally, the company behind the site advertising the $TRUMP token, CIC Digital, was also behind Mr Trump's previous non-fungible token offerings, according to crypto news site Coinage. It seems $TRUMP is legit and continues to generate a buzz.
Is its market cap for real?
News that the market capitalisation of $TRUMP was soaring quickly made the rounds, spiking to $1 billion in minutes, to $4 billion and $7 billion within a few hours. At one point it was reported to have crossed the $20 billion mark.
However, there is context to this, as there are two different market cap values in play here. A total of one billion $TRUMP tokens will eventually be launched, but, initially, only 200 million were put into circulation.
That amount of tokens, with the value of the memecoin at $22.09 as of 3pm UAE time, officially gives $TRUMP a market cap of about $4.46 billion, according to data from CoinMarketCap.
If we take into consideration its fully diluted value, or its value if the maximum supply – in this case, one billion – is in circulation, then $TRUMP's market cap would be more than $22 billion.
Will the hype be sustainable?
That remains to be seen – although as far as trends and optimism go, cryptocurrencies seem to be poised for a good run under the Trump administration.
Mr Trump was once a crypto sceptic. In his first term, he derided Bitcoin and its peers as “not money”, “based on thin air” and something that “can facilitate unlawful behaviour, including drug trade and other illegal activity”, and even called it a “scam” after he left office.
The turning point was when Mr Trump began selling non-fungible tokens depicting himself as a superhero in December 2022, a month after he declared his intention to run for president again. He raised $8.9 million in the process, which apparently proved to him that crypto can be beneficial. It may have also helped that the vice president-elect, Ohio Senator JD Vance, has been known to hold Bitcoin since 2021.
And Mr Musk, the world's wealthiest person, also has interests in cryptos and is part of Mr Trump's key picks that speak highly of them. They also include Scott Bessent (Treasury), Paul Atkins (Securities and Exchange Commission) and Howard Lutnick (Commerce).
Not to forget, Mr Trump's son Eric said at the Bitcoin Mena conference in Abu Dhabi last month that Bitcoin – sitting well above $100,000 – will hit $1 million and the administration “will fight like hell” to keep the crypto train chugging along.
