The Trump Family's Cryptocurrency Earthquake: A Deep Dive into a Financial Butterfly Effect

The Trump Family's Cryptocurrency Earthquake: A Deep Dive into a Financial Butterfly EffectAt 6:00 AM Beijing time on January 20th, Melania Trump announced the launch of MELANIA coin on X (formerly Twitter), following her husband's release of TRUMP coin, becoming the second US political figure to publicly launch a cryptocurrency. This action sent shockwaves through the cryptocurrency market, sparking widespread discussion and concern, and its potential "butterfly effect" warrants in-depth analysis

The Trump Family's Cryptocurrency Earthquake: A Deep Dive into a Financial Butterfly Effect

At 6:00 AM Beijing time on January 20th, Melania Trump announced the launch of MELANIA coin on X (formerly Twitter), following her husband's release of TRUMP coin, becoming the second US political figure to publicly launch a cryptocurrency. This action sent shockwaves through the cryptocurrency market, sparking widespread discussion and concern, and its potential "butterfly effect" warrants in-depth analysis.

The launch of TRUMP coin created a startling short-term get-rich-quick myth. Opening at $0.1824, it surged over 15,000% within 12 hours, peaking at over $80 and surpassing the market cap of many established tokens. This "wealth creation effect" rapidly attracted numerous investors, laying the groundwork for the MELANIA coin launch. MELANIA coin similarly saw frenzied buying, peaking at over $14 within two hours, boasting over 440,000 wallets and a circulating market cap of approximately $10 billion. However, Melania's tweet prominently included a warning: MELANIA coin doesn't align with its reported tokenomics, with 89% held by a single wallet, posing significant risks and potential for financial loss.

The market turmoil caused by the "coin launches" was undeniable. Following the MELANIA coin launch, TRUMP coin plummeted 60% within 30 minutes, Solana dropped 20%, Bitcoin fell 6%, and other cryptocurrencies experienced widespread declines (although most had recovered by publication). This event stunned the cryptocurrency market, with many insiders believing Melania's actions were encouraged by Trump. One cryptocurrency enthusiast bluntly stated: "Very ugly, they're not even pretending anymore, clearly a blatant rug pull."

Unlike TRUMP coin, the MELANIA coin team holds 35%, with a lock-up period of only 30 days (TRUMP coin's lock-up period is 3 years). 3% will unlock for sale after 30 days, with the remaining tokens unlocking monthly at 2.25% over the following 12 months. This means, as long as there are buyers, the Trumps can continuously "sell off" and cash out.

The significant short-term volatility in the crypto market also reflects, to some extent, the market's distrust of Trump's future policies. During his campaign, Trump promised pro-crypto policies, such as including Bitcoin in national strategic reserves and firing the SEC chair if they held negative views on cryptocurrency. However, no one anticipated his direct involvement in launching meme coins.

TRUMP and MELANIA coins are meme coins, characterized by a lack of clear utility and low market recognition before consensus is formed, primarily used for speculation and gambling. One cryptocurrency expert pointed out that meme coins are more like "air coins." Pre-election Trump was seen in the crypto industry as a "promoter, an advocate," but post-meme coin launch, he's transformed into a businessman who "will do anything for money," a stark contrast to his previous "Make America Great Again" public image. However, this "coin launch" behavior tightly intertwines Trump's political career with the crypto industry.

Wang Feng, founder of BlueFocus Interactive, posted on X: "Overnight, the Trump family's interests are tied to the entire cryptocurrency market. The decentralization and free code layer innovation of the classic cryptocurrency spirit, forming rights and consensus, have been completely superseded by national-level political power and secular social influence."

Jihan Wu, co-founder of Bitmain, views Trump's "coin launch" as a significant boon for the crypto industry: firstly, the meme coin craze attracts more retail investors; secondly, it reinforces the belief that the Trump administration will fully support cryptocurrency and ease regulations; and thirdly, it suggests the backing of numerous large American institutions and coordination, potentially leading to more institutional participation.

Trump's "coin launch" may leave a unique mark in world financial history, potentially altering traditional financial ecosystems, and even economic and social ecosystems. Currently, the Trump couple's "coin launch" is just the beginning, inevitably leading to more imitations.

Stories of early investors getting rich from TRUMP coin circulated widely on Chinese social media. There's a prevailing belief that this was a meticulously planned "open secret," using Asian trading hours to attract Chinese investors and ultimately taking their money. "The Chinese wealth that Biden couldn't touch in four years, Trump innovatively secured."

It's notable that on November 27th, TRON officially announced Justin Sun as an advisor to the Trump family's cryptocurrency project, WorldLibertyFinancial. WorldLibertyFinancial stated on X that Sun's experience would be crucial for their innovation and development. Recently, foreign media reported that WorldLibertyFinancial's public sale of 20 billion $WLFI tokens had sold out, and a 5% supply increase was added due to "overwhelming demand." Sun also posted on X, announcing increased investment in WorldLibertyFinancial, adding $45 million for a total of $75 million, including a video of him attending a reception hosted by President Trump, showing a close relationship between Sun and the Trump family.

How should we understand the "butterfly effect" of Trump's "coin launch"?

First, this can be seen as the beginning of an era of presidential profiteering. Besides his wife already launching a coin, Trump's younger son has influence in the crypto industry and secured significant support from young voters during the presidential election, making his own coin launch highly probable. Currently, many have compiled a list of Trump family members circulating on social media. Jihan Wu points out that the Trump team's "coin launch" clearly involved prior coordination with many industry companies, including Meteora, Moonshot, Wintermute, and Jupiter, with Polychain rumored to be the guiding force behind the Trump family's various cryptocurrency projects. This signifies that while making money, Trump has united a group of top industry companies, suggesting more actions to come.

Secondly, with the spread of the Trump "coin launch" effect, celebrity cryptocurrency launches may become increasingly common. "Why only a Trump coin? Why not a Taylor Swift coin? Why not a Lady Gaga coin?" one cryptocurrency insider noted that celebrity coin launches are technically simple; only market-making teams require time. As more people launch coins in the future, the phenomenon of "early buyers cutting late buyers" will become the norm. "While Trump might be legitimizing the crypto industry, it's more likely to bring about the craziest financial bubble in four years." According to BlockBeats, TRUMP coin already included a class action waiver in its terms of purchase.

Thirdly, from a crypto regulatory standpoint, there are reports that Trump will sign hundreds of executive orders upon taking office. Combined with his past promises and the support of numerous financial backers, he may abolish strict regulations targeting the crypto industry on his first day in office, shifting towards liberalization and encouragement. White House crypto chief David Sacks has publicly stated that the era of unfriendly crypto regulations is over and a new era of American crypto innovation has just begun.

Finally, a perspective exists within the financial markets that Trump's "coin launch" is a part of a series of crypto policies aimed at maintaining the creditworthiness of the US dollar. From the collapse of the Bretton Woods system in 1971 to the 2008 global financial crisis, the dollar has faced numerous challenges but always managed to mitigate risks. However, with soaring US government debt and inflation, the dollar faces credit risk again, highlighting the need to create a new "reservoir." Bitcoin's rise from a few yuan to $100,000 reflects substantial value, its foundation being just a string of code. If Bitcoin alone is insufficient to store real-world value, what about 10 or 100 other coins? When Americans can exchange strings of code for equivalent labor value in other countries, a new era of "financial warfare" may have quietly begun.