Crypto: The Fiasco Of The TRUMP Memecoin Raises Questions

In the world of crypto, memecoins seem to evolve in a parallel universe, where the law is as absent as a winning lottery ticket. Losses amount to billions, yet regulators seem to be looking elsewhere. The latest example: the TRUMP token, which melted away $2 billion in a matter of weeks, leaving its investors more impoverished than a debt-ridden trader in the midst of a financial crisis. The question of regulating these meme cryptos is now on the table.

TRUMP, the 2 billion rollercoaster

The TRUMP memecoin, launched on January 17, skyrocketed to $72.60 in 48 hours before plunging 80%, going from a valuation of $14.5 billion to $3 billion. Result? 813,000 ruined crypto investors .

Meanwhile, the Trump Organization and its partners raked in $100 million in trading fees. A jackpot for some, a disaster for others.

Some figures to gauge the extent of the disaster:

• 813,000 crypto wallets impacted;
• $2 billion in losses in just a few weeks;
• An 80% drop in just a few days;
• A capitalization divided by almost five.

For Hester Peirce, SEC Commissioner, these memecoins “probably do not have a place under the current regulation“. According to her , it would be up to Congress or the CFTC (Commodity Futures Trading Commission) to address the issue.

Nate Geraci, president of the ETF Store, agrees with her:

” Memecoins are closer to collectibles than financial assets“.

Who will regulate meme cryptos?

Letting the crypto market self-regulate is a bit like asking cats to watch an aquarium. Lyn Alden, a macroeconomic analyst, observes that this pattern repeats itself every cycle:

” The same skeptics of traditional finance who scorned Bitcoin in 2017 because of ICOs, DeFi, and NFTs now reject it due to memecoins“.

In other words, history repeats itself, and regulators continue to be overwhelmed.

With the boom of ETFs on altcoins and meme cryptos under the Trump administration, the very definition of a financial asset could change. The SEC, under Biden’s presidency, considered bitcoin as the only cryptocurrency unequivocally classified as a commodity .

But tomorrow? With ETFs on Solana, Dogecoin, and even TRUMP lurking, the line between absurd speculation and recognized investment becomes blurrier than an Airbnb rental contract.

Thus, the crypto market remains a jungle, where a few elites harvest the profits while the masses ruin themselves. But when Elon Musk sees his father attempting to raise $200 million with a dubious memecoin , it’s enough to raise questions.