Meme coin moment fizzles after Trump cashes in
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Illustration: Aïda Amer/Axios
When the most famous man in the world cashes in on a crypto trend, that's a strong top signal.
Why it matters: Revenue has been falling for the leading meme-coin platform since the Trump Organization launched the Official Trump (TRUMP) and Melania Meme (MELANIA) coins Jan. 17 and Jan. 18, respectively.
- Those coins have been plunging too, and are now worth a small fraction of their peak values.
How it works: Meme coins are nothing new in crypto, but Pump.fun made it easy for anyone to launch one on the Solana blockchain, and people have launched thousands.
- It has caused a giant speculative boom in the crypto markets, a sort of 24/7 social casino that eager people have traded while bitcoin has climbed in a steady but rather boring way.
- Frequently imitated, Pump's success remains the bellwether for the meme coin bonanza.
By the numbers: The chart above shows the revenue Pump earns from fees. As long as people buy coins on its platform, it earns a little cut.
- Then it charges 6 SOL (around $900 these days) if a token does great on its platform and graduates to trade on the Solana blockchain — but not many do.
- These simple fees have been earning it tens of millions of dollars a week.
What they're saying: "It definitely doesn't help that a significant amount of the money that was put in by retail traders at the top of $TRUMP has been lost," Alon, the pseudonymous co-founder of Pump.fun, tells Axios over Telegram.
- But he doesn't think that's what's dampened the market. To him, these tokens are simply sensitive to the prices of the big coins (such as BTC and SOL), and those "have been getting crushed."
- Total crypto market cap has fallen more than 12% since Feb. 20, per CoinGecko data. Bitcoin, which dominates the market, is off 21% from its all-time highs, which were notched the day President Trump was inaugurated.
Reality check: The Trump coins were not launched using Pump.fun. They had their own bespoke code (which reserved lots and lots of tokens for them to sell later).
- However, the entrance of the man about to become the U.S. president caused a flush of excitement in the meme-coin market.
- It didn't last.
Between the lines: The truth is that the fun in any ebullient crypto market led by normal humans always gets throttled out by the sharks, who start building trading bots that suck out all the opportunities.
- As the bot strategies get better, people have less fun. When the fun runs low, people start feeling taken advantage of, they quit trading, and the bots don't have anyone to dump on any longer.
The bottom line: It's too soon to say if this market is done for. It has dipped before, but the Trump coins' launch put most experienced traders on high alert.
- Then the LIBRA debacle out of Argentina left an extremely bad taste.
