What negative impacts will the issuance of TRUMP coins bring?

Author: Stacy Muur, Web3 Researcher

Translator: xiaozou, Jinse Finance

1. TRUMP and MELANIA Timeline

The narrative of TRUMP began even before its contract was deployed to Solana, when Trump tweeted to confirm his association with the meme coin.

If we were to list a timeline of major events for TRUMP and MELANIA, it would look something like this:

• December 21, 2024: The domain gettrumpmemes.com was purchased.
• January 17, 2025: First minting.
• January 18, 2025: A DEX trading pair was created around 2 AM UTC.
• 45 minutes later, Donald Trump posted an official tweet.
• On the same day, the domain melaniameme.com was purchased.
• January 19, 2025: At 11:30 AM UTC, TRUMP reached an all-time high of $76.
• 10 hours later, the MELANIA DEX trading pair was launched, triggering a massive sell-off by TRUMP holders.
• 40 minutes later, Melania Trump posted proof of her meme coin ownership.
• January 20, 2025: MELANIA reached an all-time high of $13.6.

There are some interesting patterns in this field worth noting:

• The launch of TRUMP was well-planned.
• The release of MELANIA was spontaneous, with its domain purchased after TRUMP's successful launch.
• The proof of meme coin ownership for both was not released immediately after the trading pair was created.

I don't want to delve too deeply into insider trading. They are just meme coins, reflecting various aspects of this industry.

Theoretically, the launch of TRUMP may be culturally related, while MELANIA seems primarily to be a money-making machine.

2. Expected and Unexpected Negative Impacts

Bitcoin has drawn liquidity away from the broader crypto market, reaching all-time highs, reinforcing the notion that "Ethereum is for storing funds, Solana is for trading," and loosening regulations—these topics were explored in depth by many insightful articles during the early stages of the Trump meme coin frenzy. I aim to avoid repeating what others have already discussed.

I want to highlight some less obvious potential negative impacts of the Trump meme coin, most of which have no solutions.

Legitimacy of Meme Coins

If the President of the United States can officially release a meme coin that drops 45% on a 15-minute candlestick chart, then anyone can do it.

Before TRUMP's release, several celebrity meme coins had already been launched, most of which slowly dropped to zero. Many believe that one day the wild west of DEXScreener will come to an end, as the SEC will eventually focus on the unregulated meme coin market, which is rife with scams and insider trading, where the only guaranteed winners are the developers.

Trump has set a legal precedent: anyone can secretly launch a meme coin and then announce their meme coin 40 minutes later, enjoying the process.

This historic move could have several significant negative impacts:

(1) A new wave of meme coin mania will emerge, with celebrities, politicians, and even companies joining the trend. What are the only rules? Disclaimers: "Token X is intended to express support and participation in the ideals and beliefs represented by Y." Thus, the rich will get richer, and the poor will get poorer—this is the universal law of meme coin trading.

(2) The number of meme coins issued will grow exponentially. Many of my friends in the Web2 space are asking me if we should all launch a meme coin together. For me, the answer is always "no"—I am not willing to gamble my reputation for money.

(3) The first step to attracting new users will be meme coins with wild west rules; with no prior experience to draw from, their chances of sticking around are minimal. To them, all cryptocurrencies will be meme coins, and in 90% of cases, the experience will be negative.

(4) After years of leniency towards the cryptocurrency industry, there will be excessive regulation to minimize fraud and "protect American citizens from the predatory wolves of crypto."

(5) Typical Web3 narratives—such as infrastructure, DeFi, and DePIN—will receive less attention. The lack of hype around altcoins in recent years and the trend of "low circulation and high FDV" issuance have created extremely challenging conditions for attracting capital and users. This issue is expected to worsen over time. Teams will need to prioritize typical product revenue models that do not require tokens to sustain.

Is this the global cryptocurrency adoption path we have been eagerly anticipating?

That is a big question.

But adoption is certainly achievable.