The crypto market witnessed significant volatility at the start of the week after the Trump family ventured into meme coins, with the tokens they launched a day earlier plummeting in value.
First Lady Melania Trump’s newly launched meme coin, Melania Meme (MELANIA), has fallen more than 60% from its debut high after President Donald Trump’s inauguration on Monday.
MELANIA now has a market cap of $625.5 million per Coin gecko facts. At the same time, Donald Trump’s meme coin, Official Trump (TRUMP) also took a sharp hit, falling 43% to $45 from a peak of $73.43 earlier this week.
The Solana-based coin skyrocketed 12,000% on its debut, reaching a high of $13.05 before falling as low as $4.18, CoinGecko data shows.
Announced as a collectible and entertainment token, from the project Frequently asked questions noted that it is “not a financial instrument or investment.” However, despite the disclaimers, the sharp drop in value has raised questions about its speculative nature.
The meme coin’s distribution model, designed for gradual release, allocates 35% of tokens to team acquisition over 13 months, in addition to a 20% allocation to treasury and community initiatives.
Conversely, TRUMP initially experienced explosive growth, break among the top 15 cryptos by market capitalization at its peak, just a day before his inauguration as US President.
However, the launch of MELANIA and the subsequent embezzlement of liquidity caused a sharp downturn for the Trump meme coin.
Infrastructure problems on Solana worsened the chaos, with platforms like Phantom Wallet and Jupiter Exchange overwhelmed by transaction spikes.
“The launch of the TRUMP token represents an unprecedented moment in the crypto markets and marks the first time a sitting president has been associated with the launch of a memecoin,” said Dan Hughes, founder and CTO of Radixtold Declutter.
Hughes noted that the subsequent launch of the MELANIA token, coupled with reports of team wallets converting TRUMP holdings into major cryptos such as Solana (SOL), Ethereum (ETH), and possibly Bitcoin (BTC) – coinciding with the rise to $108,000 – suggests a potentially coordinated strategy that could destabilize market dynamics.
“This pattern of celebrity-driven token launches, especially by political figures, potentially marks a worrying trend in crypto markets where influence and liquidity manipulation could overshadow fundamental value creation,” Hughes said.
Amid the chaos of meme coins, World freedom financial (WLF), a DeFi platform affiliated with President Trump and his family, made major crypto moves during the inauguration.
The platform added approximately 439 Wrapped Bitcoin (wBTC), worth $47 million, to his balance, increasing his holdings to 456.77 wBTC.
The purchase was part of a series of transactions totaling nearly $100 million in BTC and ETH over two days.
Speak with Decipher, Sudhakar Lakshmanaraja, Founder of Digital South Trustsaid: “The crash of Trump and Melania’s coins is a clear example of why substance must take precedence over hype in the cryptocurrency world.”
“This situation is a stark reminder that hype and speculation can only be a sign so far. Without a strong use or utility, meme coins are vulnerable to volatility and market sentiment,” Lakshmanaraja added.
The meme coin turbulence unfolded against the backdrop of President Trump’s second term inauguration, where expectations for crypto-friendly policies had fallen. left unfulfilled.
Trump’s inaugural address and initial executive orders excluded digital assets, disappointing proponents who had anticipated regulatory clarity, a Bitcoin reserve, or a reversal of the SEC’s controversial “SAB 121” rule.
Edited by Sebastian Sinclair
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