What huge negative impact will TRUMP coin bring?

Author: Stacy Muur, Web3 Researcher; Translation: Golden Finance xiaozou

1, TRUMP, and MELANIA Timeline

The TRUMP narrative began even before its contract was deployed to Solana, with Trump posting a tweet confirming his association with the meme coin.

If you want to list a timeline of major events in TRUMP and MELANIA, it should be something like this:

• December 21, 2024: The domain name gettrumpmemes.com is purchased.

• January 17, 2025: First minting.

• January 18, 2025: DEX trading pairs are created around 2am UTC.

• 45 minutes later, Donald Trump posts an official tweet.

• On the same day, the domain name melaniameme.com is purchased.

• January 19, 2025: TRUMP reaches an all-time high of $76 at 11:30am UTC.

• 10 hours later, MELANIA DEX trading pairs are released, triggering a massive sell-off by TRUMP holders.

• 40 minutes later, Melania Trump posts proof of her meme coin ownership.

• January 20, 2025: MELANIA reaches an all-time high of $13.6.

There are some interesting patterns to watch in this space:

• TRUMP's launch was planned.

• Melania's launch was spontaneous, and its domain name was purchased after the successful launch of TRUMP.

• Proof of ownership of either meme coin 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, and they reflect the industry.

In theory, the launch of TRUMP may be culturally relevant, while MELANIA seems to be primarily a money-making machine.

2Expected and Unexpected Negative Impacts

Bitcoin draining liquidity from the broader crypto market, reaching all-time highs, the “Ethereum for storing money, Solana for trading” view solidifying, and deregulation — these topics were explored in depth in many insightful articles in the early stages of the Trump meme coin craze. I intend to avoid repeating what others have already discussed.

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

MemeCoin Legitimacy

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

Prior to TRUMP’s release, several celebrity meme coins had been released, most of which slowly fell to zero in price. Many believed that one day the Wild West of DEXScreener would end as the SEC finally focused on the unregulated meme coin market, which was rife with scams and insider trading, and the only guaranteed winners were the developers.

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

This historic move could have several huge negative consequences:

(1) A new wave of meme coin craze will emerge, with celebrities, politicians and even companies joining the trend. The only rule? Disclaimer: "X token is designed to express support and participation in the ideals and beliefs embodied in Y." Therefore, 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 field are asking me if we should all launch a meme coin together. For me, the answer is always “no” — I’m not willing to risk my reputation for money.

(3) The first step to attract new users will be meme coins with Wild West rules; without previous experience to draw on, the chances of them sticking around are slim. In their view, all cryptocurrencies will be meme coins, and in 90% of cases, the experience will be negative.

(4) After several years of lax policies on the cryptocurrency industry, overregulation will emerge to minimize fraud and “protect American citizens from crypto wolves.”

(5) Typical Web3 narratives - such as infrastructure, DeFi, and DePIN - will receive less and less attention. The lack of altcoin excitement and the popularity of "low circulation and high FDV" issuance over the past few years have created extremely challenging conditions for attracting capital and users. This problem is expected to get worse over time. Teams will need to prioritize typical product revenue models that do not require tokens to sustain.

Is this the path to global cryptocurrency adoption that we have been eagerly waiting for?

That's the big question.

But it is certain to be adopted.