Home > News > The rise of meme coins: Exploring opportunities, risks, and expert insights

The rise of meme coins: Exploring opportunities, risks, and expert insights

Category: Americas Crypto
Posted by Sudhanshu Ranjan Posted: Feb 03, 2025
The rise of meme coins: Exploring opportunities, risks, and expert insights

U.S. President Donald Trump and First Lady Melania Trump have entered the realm of digital assets by launching their respective meme coins, $TRUMP and $MELANIA. These tokens, launched in mid-January 2025, exhibit very high volatility, highly responsive to the unpredictable meme coin market. On 17 January 2025, just days before his inauguration, Donald Trump unveiled the $TRUMP meme coin. Initially met with scepticism due to the absence of a formal announcement, the coin’s legitimacy was later confirmed through Trump’s posts on social media platform X.

The $TRUMP coin’s logo features a cartoon depiction of Trump raising his fist, commemorating his survival of an assassination attempt in July 2024. The project’s website emphasised that the coin was “not intended to be, or the subject of” an investment opportunity or security and was “not political and has nothing to do with” any political campaign, political office, or government agency. The terms prohibited buyers from participating in class-action lawsuits against the project and asserted indemnity against any claims.

Following its launch, $TRUMP’s price surged by over 300 percent overnight. Within two days, it became the 19th most valuable cryptocurrency globally, boasting a total trading value of nearly $13 billion, with each of the 200 million tokens valued at approximately $64 by the afternoon of 19 January. Reports indicated that Trump affiliates controlled an additional 800 million tokens, potentially significantly elevating Trump’s net worth.

Two days after $TRUMP coin launched, Melania Trump introduced her meme coin, $MELANIA. The Solana-based token quickly achieved a valuation of $12 billion within three hours of its launch. However, the construction and security measures of the project’s website have been criticised, which has led to questions about its legitimacy.

Meme coins market performance and volatility

The excitement surrounding both meme coins was short-lived. By 21 January 2025, the price of $TRUMP had declined by around 50 percent, falling from a high of $74 to about $38. Similarly, $MELANIA experienced a significant decrease, with its market capitalisation falling from $2 billion to $790 million.

As of 31 January 2025, $TRUMP is trading at approximately $0.745, reflecting a 0.11 percent decrease from the previous close, with an intraday high of $0.842 and a low of $0.742. Meanwhile, $MELANIA is priced at around $2.09, experiencing a 0.07 percent decline, with an intraday high of $2.30 and a low of $2.05.

Industry reactions and regulatory concerns

These high-profile launches of meme coins have sparked public debate within cryptocurrency circles. This speculation, often likened to gambling, threatens the reputation and future value of the field. Some are considering the involvement of gaming commissions to regulate the volatility issues associated with the inherent lack of value of the underlying asset.

Moreover, as meme coin-based exchange-traded funds (ETFs) from asset managers gain momentum, there are apprehensions about creating “casino-type” speculation in the financial markets. The future of such digital assets will largely be dictated by the U.S. Securities and Exchange Commission’s response.

Speaking exclusively with AIBC World, Justin d’Anethan, Head of Sales at Liquifi, a token launch service company based in the US, shared his views on the profound positive and negative impacts of this phenomenon. He elaborated on the promising future of the market and helped us to understand the intricate dynamics at play.

AIBC: What are the positive and negative impacts of the $TRUMP meme coin, which we’ve seen in the past week?

Justin d’Anethan, Head of Sales at Liquifi: The old industry is split between positive and negative. On the positive side, I think there are three dynamics that are coming across. The first one is it’s very supportive for the crypto space that the US president and administration would be getting involved with crypto. There’s just a very good signal in terms of support from that point.

The second one is it gives a little bit more leeway, a little bit more room for activity from a legal perspective because you kind of assume that if you’re a company and you’re operating in crypto, as long as you’re not doing something too shady, if you’re just acting on it with best intentions, you shouldn’t.

Then the third part is it sends a signal to a lot of companies that are not involved in crypto, that they can now get involved in crypto. So, if you’re Apple or Microsoft or a small company or an NFT or media or gaming and you want to do something with crypto, go ahead and do it because it’s okay.

And the negative point that we have noticed that there was a liquidity event that happened with all the other coins. So essentially, the one you were talking about with the concentration, which is you have the Trump coin launching. And all the capital that was allocated and staying with. But that feels very negative for this. It’s right because of course, it’s cool that there’s volume and activity, but if we’re being honest with ourselves, like a meme coin is just a meme coin, right? It’s not building DeFi solutions or creating an ecosystem in which people can do a variety of stuff.

Another disappointing thing within all this is if you look at the total market cap of crypto, it hasn’t moved up by that much during the events. So essentially what that means is that the capital that was traded was crypto native guys and not necessarily people outside of crypto. They didn’t have the time because you needed a Solana wallet, you needed to go onto the right DEX, needed to be aware of the thing happening. And by the time you were aware, the Trump coin was already down quite a lot, and the Melania token was out and already down quite a lot and then the Baron token and kind of went cascading down that way.

AIBC: Do meme coins pose any concerns regarding financial stability and national security?

d’Anethan: Not at all. I think even though there’s a big speculative element to meme coins, I think people, even the average investor, are smart enough and knowledgeable enough to understand that it is very speculative, that it is very volatile, right? So, I don’t think anybody is under the illusion that if they buy a Trump Coin or a Melania Coin, that it is the same as the S&P 500 or investing in IBM, Microsoft, and Apple, right? So, I don’t think any of the large, sophisticated players will get involved in meme coins, or if they do, they’ll do it in a very smart way. And so, I don’t think it will, in fact, affect the stability of financial markets. I think it might hurt a lot of retail users, the ones that will be on the losing end of the trade.

AIBC: What are the key security and privacy concerns in the cryptocurrency space?

d’Anethan: I still think one of the core values of crypto is the privacy side of things, and so I think that relative to any other industry, especially if you’re thinking about Web2 and kind of centralised models, the privacy concerns should always be higher because you’re essentially trusting a large company that typically wants to monetise its user info. The only thing is a lot of hacks, and a lot of scams do happen in crypto because, of course, the whole responsibility of that privacy and safety is on the user side of things. If you’re doing everything right, you should never get hacked because the blockchain itself cannot get hacked.

I think as more and more people get involved, you will see more of those incidents. It won’t be a fault of the blockchain in terms of architecture. It would be a fault of the user, but just because of ignorance or inexperience. You cannot share private keys, you cannot interact with something that is not audited, you shouldn’t click on links that you don’t know, or interact with people that you don’t know online, people that reach out to you without you having to reach out to them first, and so on.

AIBC: How will meme coin culture impact the market in the coming year?

d’Anethan: I want to be optimistic here and I want to think that it’s going to onboard more users. Do you know what I mean? It’s like the NFT craze of the 2020-2021 bull market where, you know, you talk to your grandmother and she was trading an NFT and you’re like, huh, how did that happen, right? And it’s like if it gets cool enough and popular enough, it will get a lot of people to at least create a wallet, try some transactions, buy some Ethereum, buy some Solana, you know, do something to participate in that speculation.

Whenever you have a trend that’s very explosive, it goes on for a while, but you cannot sustain super big growth. You can do it for six months, you can do it for 12 months or 18 months, but at some point, people are like, you know, I didn’t make as much money as I thought. I made a lot of money, but now I’m not making as much money. And so, I should kind of cool down and take my money off the table. And so, you’re going to see some losers at the end of the trend and some winners maybe at the beginning, but yeah, that’s my perspective on it.

AIBC: What is your prediction for the Asian crypto market dynamics?

d’Anethan: I’m going to give you a positive and a negative view on the market because I think on the positive side, I think a lot of jurisdictions, a lot of countries, again, are going to try to catch up to the US and show that they’re active. You’ll have a lot of countries like maybe Korea or Japan or Thailand or Hong Kong or Singapore kind of supporting the crypto space because, again, they want to maintain relevance relative to the other countries. And that’s supportive for the crypto space. And there’s a lot of traders in Asia, right? A lot of the trading activity in India, but also in Korea and Japan and Southeast Asia is very big, so it’s a thing. And so, I think that will be positive.

I’m just talking about traditional markets in general. I think the theory is that Trump is going to keep or impose tariffs on the Asia side of things. He’s going to dampen enthusiasm. That’s on the market, but it still has an impact in terms of how much money people have in the region. And if they feel a bit more fearful, there’s less liquidity, there’s less certainty. It’s harder for them to get involved in speculative assets like new crypto projects, for example. And so, I’m positive for the crypto space. I think there’s still going to be a lot of traders.

AIBC: How do you see the crypto market evolving in the next 6–12 months?

d’Anethan: I’m not allowed to give any kind of financial advice, so I’m just sharing it from an opinion perspective. First, there are some dynamics that I think we will see unfold, which is essentially you’re going to see a lot more celebrities and companies getting involved in crypto, and that’s presumably going to be positive. It just means a lot more people are aware of those solutions and getting set up or involved with DeFi solutions. The other thing is I think a lot of asset managers, sovereign wealth funds, and governments are going to have to start looking at crypto. And it’s not a question of whether they like it or not. It’s just that if the US is doing it, and if you want to stay relevant, you need to have some kind of activity, some kind of, at least in opinion, we really don’t like it.

There is some kind of strategic reserve, like a strategic Bitcoin reserve as it’s been discussed for the US, but maybe other governments will follow suit. That will be just insane, basically. So, if the US does that, a lot of other countries will have to follow. And then there’s no more price target. It just can go up so much that you just don’t even know where to draw the line. AI coins are probably going to be very trendy. I’m not really confident myself if there’s actual value or substance behind those tokens, but I think it’s a narrative that people are going to pile into because 2025 AI is the thing, and if crypto becomes the thing, then some people are going to put two and two together and kind of do an AI crypto.

Dubai, UAE event

Location

Dubai, UAE

23 - 25 February 2025

D

H

M

S

REGISTER FOR EVENT

Other related articles