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- Playing the rise of the viola: how Donald and Melania Trump's memcoins will affect the crypto market
Playing the rise of the viola: how Donald and Melania Trump's memcoins will affect the crypto market
Memcoins of Donald and Melania Trump, launched over the weekend, have dramatically gained popularity - the capitalization of these altcoins is already $10 billion and $1.6 billion, respectively. The hype of these projects is connected with the personality of the new US president, his developed marketing, and the fact that he promised to make cryptocurrency one of the national priorities - and thus once again confirmed his intentions. However, it was mainly early investors and speculators who were able to make money on the coins, experts say. All memcoins are designed for a short-term effect of the hype and may collapse in the future. The probability of losing money on them is about 80%. How memcoins affect the crypto market and what it has to do with the repayment of the U.S. government debt - in the material "Izvestia".
Is it possible to make money on memcoins Trump and his wife
Cryptocurrencies of the new U.S. President Donald Trump and his wife, launched on January 18 and 19, sharply gained popularity. In just 24 hours, the former went from $10 to $80. After official confirmation from Trump on his social media accounts, major exchanges promptly gave the opportunity to buy the token on their platforms. This happened in record time - in just a few hours, said Denis Astafiev, founder of the investment company SharesPro. He added: trading volumes on decentralized platforms reached billions of dollars, and exchanges did not want to miss the opportunity to earn on the commission.
On the evening of January 18, Melania Trump's token also became available on decentralized platforms. There it could be bought at an undervalued price. The wife of the US president-elect confirmed this information on social media, which further fueled the interest of crypto investors. Trump made a repost of the news, this led to an increase in the price of the coin overnight to $11, recalled Denis Astafiev.
By 17:30 Moscow time on January 20, the value of Trump's memcoin is $51, and Melania's is $8. At the same time, the capitalization of the first exceeds 10 billion, and the second - 1.6 billion.
All memcoins are designed for a short-term HYIP effect, emphasized Fyodor Ivanov, director of analytics at SHARD. He explained: the coins are so called because their value is linked to some meme - an event, character or personality. January 20 is the inauguration day of Trump, who promised to become the first crypto president of the United States and make cryptocurrency a national priority. The launch of tokens is timed to coincide with this event, and the calculation on their growth has justified itself, the expert said.
- Any memcoins are almost like a lottery. They have no practical value. Usually such coins grow quickly, and then fall rapidly. Another thing is if you buy them at the very beginning of a HYIP, then you may be able to make money," says Fedor Ivanov.
In the case of Donald Trump, his name and status attracted a lot of speculators, expecting a sharp rise in the price of the coin, added Daniel Tyun, senior analyst of the closed venture club "Digital Finance". According to him, active promotion in social networks contributed to the rapid spread of information and increased interest in these crypto projects.
Donald Trump has excellent marketing skills, and his presence in the media is supported by the fact that he owns stakes in various media projects, reminded Denis Astafiev from SharesPro. Thanks to this, any initiative associated with his name can be monetized. That is why Trump's token caused such a furor in the market, the expert explained.
Earlier investors and speculators were able to make money on these coins, said Venera Shaidullina, associate professor of the Department of Global Financial Markets and Fintech at Plekhanov Russian Economic University. For example, there is a known case when a trader received $185 mln on an investment of $1 mln.
Russians can still invest in memcoins despite the sanctions, said Alexei Tarapovsky, founder of Anderida Financial Group. For example, Bybit allows Russian citizens to open accounts, provide passport data and buy cryptocurrency. Other major platforms include KuCoin, OKX, HTX, GATEIO and BINGX.
- It is important to remember that meme tokens are subject to high volatility and are created solely for speculative purposes. You should not consider such assets as a long-term investment. There is a great risk that in the event of a possible price collapse, Trump will distance himself from the project and explain that the tokens were created solely as collectibles," BitRiver financial analyst Vladislav Antonov emphasized.
According to him, it is more reasonable for most investors to refrain from participating in such speculative projects, regardless of their connection to well-known political figures. The probability of losing funds invested in memcoins is 80%, said Venera Shaidullina from Plekhanov Russian Economic University.
Will Trump and Melania tokens rise in price?
Experts assume that the price of $Trump token will fluctuate in the range of $30-80, and $Melania - $4-15. However, long-term growth is unlikely because they have no fundamental value, emphasized Venera Shaidullina.
For example, the price of Trump's token almost halved in just a minute, from $70 to $40, noted Fyodor Ivanov of SHARD. According to him, in the future, its value will depend precisely on the interest of the community and the influx of new users. In addition, the coin will be affected by the first statements and steps of Trump as president.
American leaders and their families can launch new cryptocurrencies. However, the success of such coins will depend on public interest and support, believes Daniel Tyun from the Digital Finance Venture Club. If previous launches are perceived as successful or profitable, it could spur further initiatives, he believes.
The growing popularity of memcoins also leads to increased interest in the crypto market as a whole, added Fyodor Ivanov of SHARD. The token in whose blockchain they are issued benefits the most from such coins. Thus, the price of Solana (it is in the network of this coin that Trump cryptocurrencies are issued) on the HYIP rose by almost a third, to $295.
The Solana project earned $35 million in just two days - this was a historic high for it, said Denis Astafiev of SharesPro. According to him, something similar is now happening with World Liberty Financial, owned by Eric and Donald Trump. They expressed that the project will become the world's leading platform for decentralized finance. There is already a stir around the project's tokens, and many people are starting to buy them.
It is built on the Ethereum blockchain, where huge volumes of transactions are now taking place. Over the last couple of days, commissions on Ethereum have increased a lot and projects running on this blockchain are winning. All this leads to the beginning of the so-called alt-season - a period when many crypto-assets on the market begin to grow rapidly, said Denis Astafiev.
Bitcoin growth forecast
The launch of memcoins affects the crypto market, creating additional waves of speculation and increasing volatility, said Oleg Kalmanovich, chief analyst at Neomarkets. According to him, part of the market capital can temporarily move from known coins to new meme projects, which affects the growth of the latter. But usually such a rush does not last long and the capital returns to those blockchains, behind which are real technologies, the expert concluded.
January 13 bitcoin rate fell below $90 thousand, after which the cryptocurrency quickly recovered and updated the historical maximum, reaching $109 thousand. January 20, reminded Vladislav Antonov from BitRiver.
Bitcoin has the potential for further growth in the near future, especially if the overall cryptocurrency market goes up, said Daniel Tyun from Digital Finance.
To continue growth, the market needs new drivers, including specific decrees and decisions of the new U.S. administration, believes Vladislav Antonov. In the case of a positive scenario, by the end of the first quarter, the value of bitcoin may reach $130 thousand.
For example, Donald Trump recently expressed the initiative to repay the U.S. government debt of $36 trillion in cryptocurrency. Analysts are asking two questions: whether the 47th president will do it at all, and if so, where he plans to get such a large amount of digital assets (for comparison, the capitalization of his cryptocurrency is only $10 billion), stressed Freedom Finance Global analyst Vladimir Chernov. And the entire crypto market is estimated at $3.7 trillion.
However, according to him, if Trump takes crypto and the creation of a state reserve in bitcoins seriously, then the repayment of the national debt is quite possible. The president-elect will probably try to set up as many mining farms as possible and mine cryptocurrency on an industrial scale to fill the country's foreign exchange reserves with it, the expert suggested. It is the free conversion of coins into fiat currencies that will make it possible to repay the national debt.
