Since its launch just before U.S. President Donald Trump’s inauguration on January 20, the controversial “Trump Memecoin” has experienced a dramatic collapse. Despite a broader rally in the cryptocurrency market ahead of the White House’s first-ever Crypto Summit, Trump’s and First Lady Melania’s official memecoins have plunged into a dual crisis of liquidity drought and value erosion. As of press time, Trump Memecoin (ticker: TRUMP) has plummeted 81% from its all-time high, while Melania’s namesake token (MELANIA) has nosedived by 92%. This crypto experiment, fueled by political glamour and speculative frenzy, has not only exposed the fragility of the memecoin market but also sparked widespread controversy over regulatory gaps and copycat scams.
Price Collapse and Crisis of Confidence
According to CoinGecko data, Trump Memecoin surged to a historic peak of 72justbeforetheJanuary20inauguration,onlytocrashto13 shortly after, erasing over 80% of its value. Melania’s token fared even worse, shedding more than 90% of its value and now trading at less than a tenth of its launch price. Analysts attribute the freefall to concentrated token holdings controlled by the project’s creators. Blockchain analytics firm Chainalysis revealed that 50 large wallets linked to early Trump Memecoin investors cashed out profits exceeding $10 million each, while roughly 200,000 retail traders suffered losses.
Despite the White House’s pledge to position the U.S. as the “global crypto capital” through the upcoming summit, the collapse of Trump Memecoin has rattled market sentiment. An anonymous trader remarked, “When the president himself endorses a project, people overlook the risks. But now, this looks more like a carefully orchestrated pump-and-dump scheme.” Ironically, as Trump’s team promotes a “Strategic Bitcoin Reserve” plan (aimed at acquiring 1 million BTC over five years), liquidity pools for Trump Memecoin have shrunk to less than 5% of their peak daily trading volume.
$100 Million in Trading Fees: Suspicions of Profiteering
Amid the turmoil, the real winners may be operating behind the scenes. Reuters cited data from three blockchain analytics firms estimating that entities tied to Trump Memecoin raked in nearly $100 million in trading fees within two weeks of its launch, with Trump-affiliated company CIC Digital as a primary beneficiary. Per the project’s whitepaper, CIC Digital is entitled to a permanent cut of transaction fees. While the White House dismissed concerns as “crypto innovation,” Columbia Law professor Richard Briffault warned, “The president’s dual role as regulator and beneficiary creates a glaring conflict of interest.”
The revenue model hinges on liquidity pools hosted by decentralized exchange Meteora. By pre-mining 80% of the token supply (800 million coins worth over 16billionatcurrentprices),thecreatorsinjectedliquidityintothemarketwhilecollectingfees.Blockchainrecordsshowthree“founderwallets”earnedbetween86 million and $94 million from Meteora transactions between January 17 and 30. Meteora co-founder Ben Chow further muddied transparency claims, admitting on Telegram that his team had “no direct contact” with the Trump Memecoin developers.
Copycat Onslaught: 700+ Scam Tokens Hijack the Brand
The crash of Trump Memecoin has not deterred speculators. A Financial Times investigation found over 700 copycat and scam tokens flooding Trump’s official crypto wallet post-launch, with 200+ impersonating the Trump family via names like “Official Trump” and “Official Melania.” Some even adopted extremist labels like “Official Hitler.” Cornell professor Eswar Prasad condemned the trend: “Trump opened the floodgates to deception, exposing ordinary investors to enormous risks.”
The chaos is starkly visible with Melania’s token. Blockchain records show a fake “Melania” coin appeared in Trump’s wallet a day before the official launch, halving the legitimate token’s value upon release. Other copycats, such as “Elon Trump” and “Musk Army,” exploit Trump’s ties to Elon Musk to confuse investors. Industry experts warn these “rug-pull” schemes often vanish overnight, leaving holders with worthless assets.
White House Crypto Summit: Clash of Regulation and Self-Interest
The upcoming White House Crypto Summit, where Trump plans to unveil details of the Strategic Bitcoin Reserve and meet industry leaders like Coinbase CEO Brian Armstrong, is seen as a potential turning point. However, the event is overshadowed by the Trump Memecoin debacle. U.S. Commerce Secretary Howard Lutnick argued the Bitcoin reserve would “bolster national financial security,” but critics fear government intervention could distort markets or enable insider advantages.
Regulatory gaps remain a core issue. While Trump touts himself as the “first crypto president,” his family’s deep ties to Trump Memecoin raise concerns about policy bias. Democratic lawmakers are pushing for investigations into CIC Digital’s revenue and legislation to bar officials from crypto ventures. Eric Trump, defending the project, declared: “We’re proud of our crypto achievements. Trump Memecoin remains the hottest digital meme on Earth.”
Future: Market Reset After the Bubble Bursts
The rise and fall of Trump Memecoin reflects the broader chaos of crypto markets—where celebrity-driven hype coexists with systemic fragility. While memecoins continue attracting speculative capital through viral trends, projects lacking utility or oversight remain unsustainable. Analytics firm Merkle Science predicts market consolidation as regulatory frameworks emerge, but Trump Memecoin’s recovery hinges on rebuilding investor trust.
Ironically, the true “strategic reserve” here may not be Bitcoin but the $100 million in fees reaped by Trump’s affiliates via Trump Memecoin. As regulators attempt to rein in the Wild West of crypto, the entanglement of power and profit persists as the ultimate wildcard. As one retail investor lamented on a forum: “We thought we were investing in the future. Instead, we bankrolled the MAGA delusion.”
