The TRUMP memecoin is making quite the splash in the crypto pool, huh? Launched on Solana, this token has exploded, soaring 3000% in just two hours after its release. But guys, there's more to this story than meets the eye. And we're not just talking about the price action. Let's dig into the factors driving this growth, the questionable tokenomics, and what it all might mean for the market.
A Brief Overview of TRUMP Memecoin
The TRUMP memecoin hit the scene with a bang, as reported by Coingecko, reaching a market cap of $4.3 billion and trading volume of $6.3 billion, with a current price of $22.00. But hold your horses. This isn't just a random meme. On-chain data from Lookonchain revealed that a couple of whales were behind the price surge. One whale, using the handle "Fpj236…uVJr", withdrew a whopping 61,205 SOL (around $14.3 million) from OKX to buy 1.27 million tokens at an average price of $11.25. Another one spent 8.5 million USDC on 1.03 million tokens at an average price of $8.28. Can you say profits? We're looking at about $11 million and $11.8 million, respectively, in gains.
But wait, there's more! There was also a trader who, just 90 seconds after Trump's announcement on Truth Social, swapped 1.09 million USDC for 5.7 TRUMP tokens. After selling about $404K worth of coins, this guy held on to 5.43 million tokens and later sold 1.35 million to keep 4.62 million, which now sits at a value exceeding $99 million. Turned $1.1 million into $70 million in just 4 hours. Not too shabby, right?
But then, there's always a "but." A market data tracker caught a whale who sold $3.86 million worth of the memecoin only to watch their holdings skyrocket to over $67 million at its peak. This trader ended up with less than $3 million, a loss of over 2000%. Talk about bad luck!
The Tokenomics and Centralization Questions
And what's this we hear about the tokenomics? Coffeezilla, the crypto investigative reporter on X, raised eyebrows with the claim that 80% of the TRUMP token supply is owned by a single wallet. Yup, you read that right. And this wallet has been connected to an affiliate company of The Trump Organization.
"Update: finally saw the tokenomics of $TRUMP. 80% owned by one wallet."
This means only 200 million tokens are left for public and project liquidity. That's 10% public distribution and another 10% in liquidity. Six different creator and CIC Digital Groups will get their tokens unlocked after 3-12 months and will vest over 24 months. Suspicious much?
BitMEX co-founder Arthur Hayes also weighed in, calling the tokenomics "fugazi." But, and this is a big but, he also said political memecoins will be the new norm in Trump's second presidential term, so get ready for it.
"This is the launch of the political memecoin market. Any politician who isn’t afraid of knowing what the people think in real time will launch their own memecoin. These tokenomics are fugazi, but the shit is going to 100 billy."
The Implications for the Market
So what does this all mean for the crypto market? Well, the centralization of TRUMP's ownership raises flags about market stability and investor trust. When a single wallet holds a huge chunk of a token's supply, market manipulation becomes a real concern. This can lead to wild price swings that ordinary investors can't predict or handle, impacting their trust in the space.
And let's not forget potential regulatory scrutiny. If regulators start viewing this memecoin as a security, we could be in for a world of legal trouble, which would further destabilize the market and shake investor confidence.
Finally, there's the issue of smaller investors. If a handful of entities control the bulk of a token's supply, they can dictate the price and dynamics, leaving the little guys in the dust. This goes against the core principles of fairness and equality that crypto touts.
As we watch the TRUMP memecoin unfold, it'll be interesting to see how it shapes the landscape of political memecoins and what that means for the future of digital assets.
