Trump Memecoin Surges 52% After Exclusive Dinner Announcement

The Official Trump (TRUMP) memecoin experienced a significant surge of 52% on April 23 following the announcement of an exclusive in-person dinner for top token holders with former US President Donald Trump. This event has sparked mixed reactions among crypto advocates, with some viewing it as a sign that the bear market may be ending, especially as Bitcoin (BTC) rebounded above $93,000. However, others are skeptical about the sustainability of this rally.

From a performance standpoint, the Official Trump (TRUMP) memecoin has been underwhelming. After reaching a high of over $75 on its launch day, its gains quickly dissipated as investors became aware of the high concentration of tokens and the short-term vesting period. The current market capitalization of $2.6 billion for TRUMP is difficult to justify, given that 80% of the supply was allocated to founders and entities controlled by Trump.

In comparison, well-established projects such as Arbitrum, Jupiter, and Maker have market capitalizations below $1.6 billion. These projects derive their valuations from buybacks using treasury reserves or direct benefits in staking and DeFi mechanisms. For example, Arbitrum, a leading Ethereum layer-2 scaling solution, holds $2.4 billion in Total Value Locked (TVL). Jupiter, the leading decentralized exchange (DEX) on Solana, boasts $2.3 billion in deposits and has accrued $76.6 million in fees over the past 30 days. Meanwhile, Sky, the project behind the successful DAI stablecoin, holds $5.9 billion TVL and $28.6 million in 30-day fees.

Despite its underperformance, TRUMP remains a top-10 token in terms of trading activity. It is listed on major exchanges and often promoted on social media by Trump. The memecoin holds an impressive share in derivatives markets, with its futures open interest standing at $700 million, placing it in the top 10 overall. Established projects with market capitalizations over $6 billion, such as Chainlink, Litecoin, and Polkadot, have smaller futures open interest than TRUMP. However, while demand for futures markets allows larger traders to participate, it does not necessarily imply optimism as longs (buyers) and shorts (sellers) are matched at all times.

Even though TRUMP is currently trading 84% below its all-time high, it remains a top-10 token in terms of volume. In fact, excluding stablecoins, only four cryptocurrencies surpassed TRUMP’s impressive $3.84 billion 24-hour turnover. Despite the huge trading activity, a single promotional event with former US President Trump is unlikely to create lasting demand for the TRUMP memecoin, putting the current $13.50 price tag in check. Unless the project eases investors’ concerns about token unlocks, there is hardly a way to justify the 50% premium versus cryptocurrencies that offer utility and perspectives of growth.

It is worth noting that Shiba Inu, another memecoin with no real utility, presently trades at an $8 billion market capitalization. One could easily argue that a token officially supported by the sitting US President is worth far more, paving the way for $30 or higher price targets for TRUMP. However, the sustainability of this rally remains uncertain, and investors should approach with caution.