Investing.com – The cryptocurrency market is in shock following the launch of Donald Trump's $TRUMP meme coin, which has risen more than 11,000% in value since its launch on Friday. The coin reached a market capitalization of $66 billion on Sunday afternoon, marking Trump's bold entry into the field of digital asset and commodity sales ahead of his imminent inauguration on Monday.
The $TRUMP coin was announced on Truth Social on Friday night and was presented as a commemoration of Trump's presidential election victory. The coin, which is based on the blockchain platform, started with a limited supply of 200 million coins. According to the coin's official website, the supply is expected to increase to one billion in the next three years.
The dramatic rise of $TRUMP has generated many rumors, but Nigel Green, CEO of deVere Group, advises caution. Green said: “This is a resurgence of the meme coin trend we saw in 2021 and 2022, where many young and inexperienced investors were affected by extreme volatility. Investors will no doubt be affected by this frenzy as well.”
Green noted the speculative nature of meme coins and warned that their values can vary dramatically. He clarified that while some can make big profits, this type of investment is inherently high risk and unpredictable. He said: “Let's be very clear: this is more of a game of chance than an investment. If you are considering getting involved, you must first have a solid, diversified, long-term plan.”
The rapid rise of the $TRUMP coin highlights the risks associated with meme coins, which are less influenced by fundamentals and more by social media-driven hype. Green compared the phenomenon to gambling and stated that many day traders are likely to join it in hopes of capitalizing on fear of missing out (FOMO). He said: “They mostly don't buy because they believe the currency has inherent value. They buy because they hope others will drive up the price, allowing them to sell at a profit.”
Green emphasized that this strategy carries significant risks and that meme coin valuations are likely to fluctuate wildly. He added: “Understand the real risks to your money. This is not the same as investing in solid assets. Gambling is not the same as investing.”
Despite the rumors surrounding $TRUMP, the launch could signal a crypto-friendly approach by the incoming Trump administration. Trump's foray into the digital asset space is speculated to align with his government's likely favorable stance on cryptocurrencies, which could potentially lead to greater adoption and innovation in the sector.
Green remains optimistic about the broader implications for the cryptocurrency market, stating that a pro-crypto administration could accelerate the adoption of digital currencies and blockchain technology. He said: “This will have long-term benefits for the economy. But it is important to distinguish between speculative meme currencies and legitimate digital assets that provide real value and utility. If you want the thrill or novelty of chasing big profits, make sure it is part of a diversified strategy and not its main plan.
As the market responds to this latest development, the rapid rise of $TRUMP underscores the broader debate over the role of cryptocurrencies in the current financial landscape. Green concluded: “The Trump presidency is expected to usher in an era of pro-crypto policies, and while this could pave the way for legitimate growth in established assets like , it also raises questions about the risks of speculative trading driven because of the social media hype.”
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