Trump and its impact: Is the market entering a frenzy?

Author: TPan Source: Web3 with TPan Translation: Shan Ouba, Golden Finance

Friday, January 17, 2025, 7:30 p.m. My wife and I arrived early for Adam Ray's Dr. Phil Live Show, which was to start at 8 p.m.

I'm proud of myself because I turned my phone to silent mode while having dinner at 6 o'clock and didn't check the messages. After arriving at the performance venue, I finally had time to catch up on notifications and updates on X (original Twitter).

On X, everyone was discussing one topic:

Did Trump really release a meme coin? Is this a scam? !

Everyone is running around like a headless chicken in the digital world, and I am preparing to enjoy the upcoming laughter feast.

Seeing technical detectives like @cygaar share their findings, I thought it was worth a try. So I bought some TRUMP. But because the show was about to start, I had to suppress my curiosity and not check my phone.

Aside from the positive crypto news in the past few days, these are the only similar cases that I can think of:

• Bored Ape Yacht Club’s “Fuck It. Mutants Saturday” post;

• Yuga Labs’s announcement about Otherside (also on a Friday night);

• Azuki’s “Check your wallets” message when announcing the Beanz airdrop.

Honestly, those cases pale in comparison to what happened today. This is the President of the United States we are talking about!

Memecoins

Before I go on, I want to mention that I write about memecoins from time to time, especially as this trend continues and grows, so has the frequency of coverage.

Whether we love them or hate them, memecoins have become a phenomenon that can't be ignored. They're proxies for attention, can reach absurd and volatile valuations, and can make empty wallets rich overnight—or make rich people poor overnight.

With memecoin issuance platforms like pump.fun, it now takes only a few minutes to create a memecoin. Since these platforms launched less than a year ago, the growth of memecoins has exploded.

TRUMP’s First-Level Impact

While memecoins have attracted a ton of new users, the phenomenon brought on by TRUMP is on another level entirely:

• By Saturday night, more than 400,000 new users had joined Moonshot, a popular mobile app specifically for buying memecoins and a partner issuing the tokens. Aside from Trump himself, Moonshot may be the biggest winner.

• Moonshot surpasses 1 million daily active users (DAU).

• Moonshot is #5 on the top iOS downloads chart, rivaling even VPN apps that have seen a surge in downloads following the TikTok ban.

• Crypto.com app changed its app title to include “TRUMP” for better App Store Optimization (ASO) and updated its screenshots to highlight TRUMP and the MELANIA token (yes, there’s a Melania-related meme coin, too, but we won’t get into that here, haha).

• Chainalysis released a report on TRUMP and MELANIA token holders with some interesting stats:

• About 50% of TRUMP/MELANIA token holders have never previously purchased Solana’s altcoins (excluding $SOL and stablecoins from the Solana blockchain).

• Nearly half of buyers created a wallet on the day they purchased the tokens.

• The vast majority of wallets holding TRUMP/MELANIA are valued at less than $100, indicating a large portion of retail activity.

There is no doubt that TRUMP has attracted the millions of new users we have been calling for, although in a way that many people may not like.

Regardless of our views on Trump or memecoins, I hope everyone can view this moment with a "glass half full" mentality. As I mentioned in "The Memecoin Super (User Attraction) Cycle":

NBA Top Shot attracted a large number of new users in February 2021, with more than 80,000 unique buyers that month alone. Many users eventually turned to NFTs, some of whom later became entrepreneurs, creators, or contributors to the ecosystem. I was personally drawn into the space by the speculation and the potential for big money, as were many others I’ve met over the past few years.

Love it or hate it, memecoins are introducing a whole new group and class of users to our world, which may validate the hypothesis of a memecoin supercycle.

• Some are using a crypto wallet for the first time (luckily, the user onboarding experience is much better now than it used to be).

• Some are starting to learn the concepts of slippage and token swaps.

• Some may lose all their money and confirm that crypto is indeed a “scam.”

• Some will stay and start to wonder what else is going on in this strange world.

This is the beginning of the memecoin supercycle.

TRUMP’s Secondary Effects

The second-level effects of Trump’s launch of TRUMP are both worrying and fascinating.

Worrying Aspects

Now, a head of state has officially launched a memecoin, which is equivalent to opening all the “Pandora’s boxes” in the world of memecoins. Or in the words of “meme trenches”, this is already “crime season” (crime szn).

Events over the past few days include:

1. The official account of the Cuban Ministry of Foreign Affairs announced 4 memecoins and then rugged. It is unclear whether this was an inside job or a hacker, probably the latter.

2. The account of Brazilian politician Marco Feliciano was hacked and announced a scam memecoin.

3. The Catholic News Service had its account hacked and released a scam meme coin.

4. The pastor who prayed at Trump’s inauguration received a meme coin and publicly endorsed it, with proceeds going to his church.

5. Rumors spread that MrBeast would launch a meme coin, and he had to publicly state that he would not create any meme coins.

The token economic model of the TRUMP meme coin has also attracted attention (information shared on the website):

20% of the supply will be circulated in the first 3 months, and 80% of the supply will be released monthly for the remaining 21 months.

No one knows how the price of TRUMP will change, but in April, "Creators & CIC Digital" may begin to put tokens on the open market and sell them to unsuspecting buyers and holders. Based on these trends, we are likely to see more hacking attacks, fake "official" issuances, and scams flooding the market. Everyone must remain vigilant!

Interesting follow-up developments

On the other hand, the launch of TRUMP has also triggered some interesting dynamics:

1. Several asset management companies have applied to launch memecoin ETFs (it is not yet certain whether they will be approved).

2. Trump was asked about his memecoin and responded to it.

3. Mark Cuban criticized TRUMP's predatory token economic model and proposed a similar model, suggesting that token proceeds be used to pay US Treasury bonds.

4. The founder of Vine, a social video app that was the predecessor to TikTok, acquired by Twitter in 2013 and shut down in 2016, launched the VINE meme coin. He used this to echo Elon Musk's interest in reviving the app and hinted at a surprise release on Vine's birthday.

The last two points are particularly noteworthy because we see some creators starting to think about the potential uses of meme coins beyond attracting attention.

From the traditional model -

“Attract attention → Push up prices → Sell for profit”

To a new path:

• Mark Cuban: Attract attention → Push up prices → Use proceeds to reduce the US national debt.

• VINE: Attract attention → Push up prices → ???

Purposefully use attention

If the “legal gloves” of memecoin are removed and individuals or entities are able to use it more creatively, what new uses might it bring?

The simple answer is: we can reuse the NFT model, including promised access rights (such as token gating), decision-making rights, and rewards mechanisms.

Balaji shared a hypothetical scenario about TRUMP over the weekend, combining its huge market value with Trump's huge audience base (excerpt below):

11) One way to solve the incentive mechanism problem is for Trump to airdrop some TRUMP tokens to every US citizen. However, it may be easier for him to simply send an email to every Trump supporter in his personal name, offering free TRUMP.

12) Specifically, he can give 72 hours notice so that even Democrats will sign up for his personal email list to get the airdrop.

13) Is this legal? Obviously, it is legal for politicians to send fundraising emails to voters. But no politician, to my knowledge, has ever attempted to "give money away" via a personal airdrop, especially on such a large scale.

14) Trump could airdrop $100 worth of locked TRUMP to each of his 77 million Trump voters at current valuations, for a total cost of only $7.7 billion, an asset that was worth zero two days ago. He could even give $500 per person and still have over $20 billion left over.

15) Yes, this would cost Trump some money. But if joining his mailing list is required to claim the tokens, and if the airdrop can be done without capital gains taxes, it will "pay for itself" by making his supporter base even more rabid.

16) This could even win him the necessary political support to completely dismantle the Democratic Party's interest network. Basically, by joining Trump's mailing list and supporting his crypto policies, you can get a benefit similar to "basic income" (UBI).

17) If 77 million Americans also benefit from TRUMP, then the charge of conflict of interest disappears. This would be a new type of social contract, a personal relationship between the president and the citizens.

This assumption obviously changes the nature of the incentive mechanism, especially when the audience size reaches thousands or even millions. This model may open up completely new paths for the use of memecoins.

At present, the potential of memecoins in this new environment is unclear, but emerging ideas and themes will soon surface.

Has the mania phase of the cycle begun?

If you ask me, Friday night seemed to herald the beginning of the mania phase of the cycle. But as is the way with these things, no one can predict how long the music will last, especially with so many positive regulatory changes this week.

So, maybe we are still a little way away from a true mania.

Here are some signs that the "silly season" (a phase of highly speculative and irrational markets) has arrived, all of which was triggered by the launch of Trump's memecoin:

1. On Tuesday, 8 of the top 10 downloaded financial apps were related to cryptocurrency.

2. Crypto "extreme speculators" (Degens) have started bringing their parents to the Moonshot app (which is also cool in itself!). 3. In the Discord server, I captured this interesting conversation: • Someone asked, “How long do you think this craze will last?” • Another person replied, “As long as it’s enough for me to buy that Lambo.” In any case, I’m going to enjoy the new energy in this field.