SignalPlus Macro Analysis Special Edition: He’s Back
The highly anticipated Trump 2.0 did not disappoint, as the incoming president made a series of eye-catching moves within just a few days, including a "very good" call with Chinese President Xi Jinping, indicating a delay in the TikTok ban, and incredibly launching the "official" $TRUMP token on Solana, providing a preview of the "investment" atmosphere for the next four years.
Even by the wild standards of cryptocurrency, the astronomical rise of the $TRUMP memecoin is unprecedented, and we believe it sets a dangerous (and unhealthy) precedent for the entire industry, especially as mainstream institutions are just beginning to recognize the legitimacy of cryptocurrencies.
Here’s a quick recap of the $TRUMP token launch event that captured global attention in the past 72 hours:
$TRUMP launched unexpectedly on Friday night, when most people were unaware.
The token was issued on Solana, aiming to maximize its memecoin impact, with a clear intent.
Twitter users noted that $TRUMP-related websites and addresses had been set up weeks in advance, indicating a well-planned operation.
The token's market cap soared to about $14 billion (FDV surged to about $70 billion) within hours of issuance, making it one of the largest tokens by market cap and breaking records across all capital markets.
DEX trading dominated, with Solana's largest DEX generating about $25 million in fee revenue in a single day, while Moonshot became one of the most downloaded iOS apps in the U.S., attracting nearly $500 million in trading volume and 200,000 new users.
Major U.S. exchanges (Kraken, Coinbase) broke tradition by being the first to list the $TRUMP token, with U.S. influence in the cryptocurrency space continuing to grow during this cycle.
Various on-chain analyses have sparked rumors about whether the $TRUMP team has been selling tokens during the rise.
Amid a wave of FUD surrounding Ethereum (ETH) (underperforming), Trump's World Liberty Financial team made headlines over the weekend by purchasing about 15 million ETH, further raising questions about their recent motives.
Just as the market was preparing for the Monday U.S. stock market opening and anticipating the president's first-day executive orders, his team dropped another completely unexpected bombshell: the hasty launch of the $MELANIA token, causing the price of $TRUMP to plummet by 40% and dragging down the entire ecosystem. Now the question is, will there be a $BARRON token?
Observers in both TradFi and the cryptocurrency markets are struggling to understand the "wisdom" of this incoming president launching a memecoin just days before taking office, but with the launch of $MELANIA, any remaining rational thought has been completely shattered. Setting aside legitimacy issues, these opportunistic actions may have severely damaged the legitimacy we have worked to build over the past 18 months. Moreover, memecoins are essentially a zero-sum game (temporary wealth effect), and the explosive rise of $TRUMP/$MELANIA has siphoned off significant liquidity from the system, exposing many latecomer investors to substantial capital risks.
We are concerned about this and hope that these meme-driven developments can take a backseat, allowing the industry to refocus on the formalization process related to institutions.
Returning to the "boring" ordinary market, the Trump 2.0 term will begin against a backdrop of extremely strong U.S. economic performance (Atlanta GDP model predicts ~3% for the fourth quarter) and the U.S. stock market nearing historical highs. Given Trump's inconsistent stance on tariffs, more unstable yet direct policies are expected in the future regarding tariffs, immigration, fiscal spending, and even personnel changes. There are rumors that Vivek Ramaswamy is preparing to exit D.O.G.E to run for governor of Ohio.
Wall Street expects Trump to sign 50-100 executive orders on his inauguration day, with the specific impact on the U.S. market depending on the details of the signed orders. Since September, the market has performed well, with asset prices generally rising, and the stock market also performed well last Friday due to friendly CPI data and the rise of BTC.
Although the market eased last Friday, the bond market may face greater challenges in the future, as the Federal Reserve continues to grapple with loose financial conditions, a strong underlying economy, and tricky inflation issues. New Federal Reserve official Beth Hammack expressed concerns about sticky inflation in a recent interview with The Wall Street Journal, echoing the strong performance of recent employment, new housing starts, and industrial production data.
This week is bound to be a crazy one; wishing everyone successful trading!
