Trump's Meme Coin Plunges 74% After Record High

Former U.S. President Donald Trump's foray into the cryptocurrency world has sparked both excitement and concern among investors and financial experts alike. Trump's official meme coin, TRUMP, reached an all-time high of $75.35 just two days after its launch, coinciding with the start of his second term. However, the hype was short-lived, and the coin's value plummeted to $19.38 by Feb. 1, a full 74% decline from its peak.

Despite the significant drop, the market capitalization of the coin remains at about US$2 billion. However, it is reported that the tokens are supposedly 80% held by Trump Organization affiliates, raising concerns about the coin's liquidity and potential for manipulation.

SkyBridge Capital founder Anthony Scaramucci, a former ally of Trump who has since become a sharp critic, rebuked the former president for inflating the value of the coin. Scaramucci took to X to express his disapproval, stating that Trump's attempt to "pump" the coin on Truth Social had led to an acceleration of the "dump," with the coin's value falling 70% from its peak.

Through his company, Trump Media & Technology Group, Trump has repeatedly used the Truth Social platform to promote digital assets such as NFTs and DeFi projects. However, a leaked memo from New York-based hedge fund Elliott Management warned that Trump's endorsement of these digital currencies risks a speculative frenzy that could "wreak havoc" on financial markets.

Ironically, Elliott's founder, Paul Singer, has close ties with Trump's political machine, having donated $56 million to conservative candidates in 2024, including $5 million to the "Make America Great Again" PAC. Despite his political support, Singer's memo questions the U.S. government's promotion of dollar alternatives when other nations are actively moving away from it.

Since Trump's re-election, Bitcoin has soared past $100,000, bolstered by his pledge to make America "the Bitcoin superpower of the world." He quickly issued an executive order intended to strengthen a national crypto stockpile. However, Elliott's memo raises concerns about the U.S. government's crypto policies, questioning why the country would promote dollar alternatives when other nations are moving away from it.