On $TRUMP
Three Things #154: January 26, 2025
A week ago, shortly before his inauguration, Donald Trump launched his first official meme coin, $TRUMP, otherwise known as “OFFICIAL TRUMP.” The coin mooned within the first few hours of trading, going from pennies to a peak of over $70 with a market cap of $14B. Literally overnight, it became the second biggest meme coin after only Dogecoin, and while it’s fallen somewhat since then, it remains in the top five meme coins by all metrics including market cap and trading volume. Fortunes were literally made and lost overnight. Those who were lucky enough to find out about the launch quickly, within the first few minutes, and had liquid capital to deploy in force, made a killing.
Since then Crypto Twitter has been abuzz with talk of the launch: how it happened, what it means, and why it’s such a big deal. I couldn’t help but offer my two cents.
Thing #1: The Good 🍀
First and foremost, the launch of $TRUMP confirms something we suspected but didn’t really know for sure: that Trump is clearly very pro crypto. We’ve had hints of this for some time, from the launch of World Liberty Financial, the NFTs he previously launched, and the influence of his sons. We knew that several of his closest advisors are pro-crypto. We knew that Trump planned to fire Gary Gensler, and to set up a crypto advisory council, and in the past few days he also suggested ending several witch hunts directed at crypto projects. (Since the launch he’s made additional moves such as pardoning Ross Ulbricht and launching a crypto working group.) Beyond this, however, he previously said very little about crypto and never demonstrated much knowledge of it.
The launch of the $TRUMP meme coin makes it clear that Trump’s feelings about crypto go far beyond mere curiosity or tolerance. The timing is significant, too, and sends a very clear message that, while crypto policy isn’t his top priority, it is on his short list. What’s more, he’s clearly willing to both tolerate and participate in crypto shenanigans, and in a drastic pivot from the previous administration he expects regulators including the SEC to play along.
This is likely to be a theme of his administration and of the next four years. Gensler is finally gone, the days of regulation via enforcement actions are over, and we’re on the verge of an explosion of activity in blockchain, cryptocurrency, and digital assets more generally in the United States. Trump’s team has even proposed ending capital gains tax for US-based crypto projects. This is sorely needed, and will be extremely beneficial for the country over the long run.
Secondly, tens of thousands of people used blockchain and cryptocurrency for the first time over the past few days. The importance of this cannot be overstated. $TRUMP didn’t begin trading on centralized exchanges like Binance, Coinbase, and Robinhood until a day or two after launch, which means that in order to join the fun thousands of people had to figure out how to set up a crypto wallet, move funds into it, and transact on a decentralized exchange (DEX).
The launch was also a boon for Solana, which hosts the coin. It likely went a long way towards raising awareness of that project and ecosystem. One second order effect of the launch was that $SOL seriously outperformed $ETH and other assets over the past few days. The Solana blockchain processed more transactions in a single day than ever before, basically every other Solana metric is at an all time high, and while there were some issues landing transactions, the network didn’t fall over and it proved to be another useful stress test.
Finally, as the most successful meme coin launch ever, $TRUMP proves once and for all that meme coins are a cultural and economic force to be reckoned with, and that they’re not going anywhere anytime soon. I have mixed feelings about meme coins and I’ve changed my mind about them over time (more on this in a moment), but on balance I think that they’re a good thing. Memes are nothing new, and people have always traded on memes indirectly: a good example is buying Tesla stock as a way of “investing in the Elon meme,” even if one knows absolutely nothing about electric cars or batteries. Allowing people to invest in memes directly is even more efficient from a financial perspective.
Meme coins are also simple, easy to understand, and accessible. Many people are turned off by what they perceive to be the extremely right curve, highly technical culture of many blockchain communities—I’ve certainly been guilty of contributing to this myself in the past. By contrast, however, there’s very little to understand about a meme coin: it is what it is, and it doesn’t pretend to be anything it isn’t. There’s something attractive about that degree of honesty and transparency, especially in an industry infamous for scams and rug pulls. Most meme coins also tend to have fair launches, relative to projects that promise more and underdeliver (although this isn’t true for $TRUMP coin, more on this in a moment).
Meme coins are obviously a mixed bag, and they aren’t all good—we’ll get to the dark side next. But in general I’m happy if meme coins are what it takes to bring millions more on chain. They tend to be a “gateway drug” in the sense that people often graduate from meme coins to using other, more sophisticated crypto apps and services. It’s not a bad place to start.
Thing #2: The Bad 💔
I previously wrote a little bit about the dark side of meme coins, and why I previously dismissed them and found them distasteful. I have the same split brain about $TRUMP coin as I do about other meme coins. While I’ve generally come around to the idea that meme coins are harmless to somewhat positive, and while I’d put $TRUMP into the same category, I still can’t completely see past the dark side of meme coins. It still irks me, and I still find them distasteful. Here are some of the reasons, all of which were on display recently with the launch of $TRUMP.
First and most obviously, while a tiny number of lucky people and insiders made vast sums of money trading the coin, lots of people doubtlessly lost money too. Given how volatile the price has been, my strong suspicion is that more people lost money than made money. That seems to be the way these things always work, and it’s why any form of trading other than long-term, broad-market bets (e.g., buying and holding bitcoin or index funds) is gambling plain and simple, ill advised for most investors.
At least stocks aren’t zero sum: a company’s earning potential can rise, and when this happens all equity holders benefit together. This simply isn’t true of a meme coin, which has no earning potential and is thus unfortunately zero sum: for one person to make money, by definition, there must be someone on the losing side of the trade. (Actually, it’s worse: when you account for trading fees, slippage, MEV, gas, etc., trading meme coins is clearly negative expected value.) Put another way, all meme coins are ponzi schemes. When the music stops playing and people stop buying, the price crashes, and the greatest fools lose their shirts. Unlike equities, commodities, art, etc., meme coins have zero intrinsic value so there is no price floor. Let me say that again: you very well can lose 100% of the money you put into a meme coin.
There’s only two ways to make money trading meme coins: alpha and luck. The people who made meaningful amounts of money on $TRUMP were insiders and those lucky enough to find out about the coin in the first few minutes of its launch, before news had even landed on X. These were also already-wealthy people who had a lot of liquid assets already deployed on Solana, ready to move into a new trade on a moment’s notice.
I could’ve been one of those people. I saw people talking about the coin’s launch in a Telegram group shortly before it happened. I don’t have any direct or even indirect connections to Donald Trump, his family, or the people behind the launch of the coin, so if I heard about it early, then there must have been a lot of other people who did, too. Unfortunately, the window of opportunity to profit from this and other meme coin launches is tiny, and for the other 99.99% of people not in the know, by the time they find out it’s already too late. (Including me: I only noticed the messages hours later, since I tend not to follow trading signals too closely.)
Another aspect of the dark side is the chilling effect these launches can have on those who miss out. We’re social creatures and our absolute wealth and wellbeing actually matter less to our happiness than our perception of how we’re doing relative to the people around us. I know a lot of well off, crypto wealthy types who are angry and depressed that they missed this “once in a lifetime” opportunity, and some who say that they fumbled generational wealth immediately following the launch. I fear the negative ramifications on the mental health and wellbeing of these folks.
Similarly, the thing that’s always bothered me the most about meme coins is the chilling effect they have on “real” builders: i.e., on people like myself who are working hard to build real infrastructure and real, useful, valuable applications on top of that infrastructure as a means to create real, lasting, long-term value. I know dozens of fantastically talented, hard working builders who are totally depressed and demoralized every time they see a new meme coin launch, or hear about the “grifters” who profit not from talent or hard work but from luck, trickery, and trading on their own or someone else’s name. Despite contributing nothing technically these projects attract billions of dollars of capital, while “real” builders often struggle to keep the lights on and the devs paid. $TRUMP is no different in this respect, and I’m certain its launch angered a lot of builders.
In this respect, $TRUMP is a vampire attack, taking investment and attention from more worthy builders and projects. That’s pretty bad.
Thing #3: The Ugly 🐍
Most of these criticisms are true of meme coins in general, and not of $TRUMP specifically. What makes this particular meme coin worse than many others?
As mentioned above, one of the things that appeals to me about meme coins is that most are fairly launched: the coin is born on a platform such as Pump.fun and the economics are totally transparent. There’s no presale and no insider sales. Everyone else plays by the same rules, and unlike most crypto launches, insiders don’t get access to coins for less than retail. The coin’s creator is the initial buyer, there’s an allocation of coins auto-generated on an automated market maker and anyone is free to buy those coins at the current price.
None of this is true of $TRUMP. Insiders hold 80% of the coins, and only 20% was offered to the public. I personally find these huge insider allocations, as well as the popular low float, high FDV strategy particularly shameful. I understand that a team needs to hold some portion of the coins for things like liquidity provision and market making, but this doesn’t need to exceed single digit percentage. In my mind, the entire point of cryptocurrency is democratization and equal access to opportunity. Coins like $TRUMP are antithetical to that, and are clearly and shamelessly a cash grab on the part of the creators. (The Trump team has purchased hundreds of millions of dollars of other crypto assets, including bitcoin and ether, in recent days—coincidence?) Projects like this make me lose faith in the industry. It stands in opposition to everything that cryptocurrency stands for, especially the idea of democratization and that everyone plays by the same, transparent set of rules (i.e., credible neutrality).
More than anything, I think, $TRUMP makes clear that we’ve entered a new era of robber barons: a time when the loudest, most obnoxious scammers and grifters, billionaires and oligarchs, can make ungodly amounts of money at the expense of their supporters and of everyday, retail, amateur investors. What’s worse, $TRUMP has completely normalized this behavior. There’s something simply shocking about the incoming US president shamelessly dropping a meme coin on the eve of his inauguration: it’s the kind of thing that sounds so extreme that, if you had suggested a few years ago that it would happen soon, no one would’ve believed you. And yet, here we are, and many people no longer feel like it’s a big deal. The Overton window has expanded significantly, for better and for worse. Lots of things that weren’t possible just a few days ago are now possible, and while on the one hand that’ll lead to more experimentation and more innovation, it’ll also lead to more scams and rug pulls, and to more know-nothing retail investors getting fleeced.
Equally saddening, it’s clear that we’ve entered an era of unbridled crypto nihilism. I touched upon the chilling effect meme coins like this are having upon builders. As fun and attention-grabbing as the $TRUMP launch may have been, because of its impact on builders and the way it sucked in so much attention and capital so quickly, the overwhelming feeling it gives me is one of sadness and nihilism. One reason for this nihilism is the utter failure of crypto to deliver any applications that everyday users care about (other than perhaps money), even after more than a decade and despite hyper-inflated expectations and the ungodly sums of money invested.
This is an era where real projects, with real substance and with the potential to create real value for humanity, quite literally struggle to keep the lights on, while nihilistic shitcoins and meme coins pump into double-digit billions. As a builder it’s depressing and disheartening. I’ve seen quite a few old-timers weigh in on Crypto Twitter, suggesting that they no longer recognize the industry, that the values that attracted them aren’t valued anymore, and that they’re taking some time off or leaving for good. I don’t blame them. The Rubicon has been crossed, and more than ever we’re now fighting an uphill battle to remind people why we started and why we’re still here. Hint: it has nothing to do with meme coins.
To believe in something like $TRUMP, to value it more highly than you do legitimate infrastructure and application projects, your world view has to be pretty bleak. Either you believe in the greater fool theory, and you’re happy rugging know-nothing retail investors who pile onto the trade after you, or you genuinely feel that there’s nothing more promising or potentially valuable to put your time and money into. I’m not sure which is worse.
You may ask why, in spite of my frustration and sadness at this trend, I’m still here. I understand that this is the new reality and I believe we should embrace it. Meme coins are here to stay, and they, too, bring joy to people. Our core values include personal responsibility and self sovereignty. If the people decide that they want to trade meme coins, who am I to stop them? Who am I to judge? Give the people what they want. And we builders can and must learn from what works for meme coins and adapt, or die trying: e.g., one lesson is that we shouldn’t take ourselves so seriously.
The dialectic here is clear: infrastructure enables meme coins, and meme coins lead to new users and more capital entering the ecosystem, which in turn allows the infrastructure to grow. Like it or not, we’re bound together, you and I. Let’s make the most of it.