Trump's Memecoins: A Wild Ride for Crypto Newcomers

The launch of the Official Trump (TRUMP) and Melania (MELANIA) memecoins by Donald Trump has sparked significant interest and controversy in the crypto world. The tokens initially surged, with TRUMP reaching a high of $72 on January 19, but subsequently plummeted to $37, a 49% drop. This volatility has drawn first-time crypto investors but also left many with substantial losses.

Crypto analyst Ryan Lee told Cointelegraph that while the memecoins have attracted new investors to the space, their speculative nature has made them a double-edged sword. Legal experts predict lawsuits are inevitable as disgruntled investors seek to recover losses. Crypto lawyer Preston Byrne stated, "There's a 100% chance of a civil lawsuit within two months."

The legal implications of TRUMP and MELANIA tokens remain uncertain. Crypto lawyer Aaron Brogan explained that memecoins often exist in a "litigation vacuum" because they don't meet the Howey test to be classified as securities. Despite this, Brogan believes lawsuits are likely, stating, "The torrent of legal filings is about to make Noah's great flood look like a sun shower." Adding fuel to the fire, California Representative Maxine Waters warned that Trump's memecoin ventures could pose national security risks.

The memecoin launch triggered a surge in crypto interest, with Google searches for "crypto" hitting their highest level since Bitcoin's 2021 peak. On January 22, crypto trading apps dominated the U.S. Apple App Store, and Solana saw a record 9 million new wallet addresses, according to Copper.co. While Trump's memecoins have undeniably put crypto in the spotlight, critics like Coffeezilla argue the launch "should be a crime." With prices down 53% from their peak, many investors face losses, highlighting the risks of speculative tokens tied to political figures.

Chainalysis data reveals that the majority of TRUMP coin holders have less than $100 worth, suggesting that it's heavily owned by retail investors. A survey of wallet age shows that a lot of these retail buyers are new to crypto, with the majority having just opened their wallets compared to the 16% of holders who've had the wallet for at least a year. However, the question remains whether these new wallet holders will become active participants in the overall