Broken Tokens? Unpacking the Trump and Melania Meme Coins

It’s definitely a historical first. The President of the United States and the First Lady launched meme coins in the days leading up to Inauguration Day, inviting speculators and a whole lot of commentators.

President Donald Trump announced the launch of his Trump coin on the X platform on January 17, three days before Inauguration Day:

Courtesy: @realDonaldTrump

Then, two days later, First Lady Melania Trump’s official X account announced the Melania coin:

Courtesy: @MELANIATRUMP

Trump vowed to be the Crypto President, and there’s no denying that he’s jumping headfirst into the cryptocurrency pool. At the same time, not everyone is happy about the President and First Lady releasing their own cryptocurrencies.

I’ve seen folks on social media overtly calling the Trump token a scam, while others might use terms like “rug pull.” I certainly won’t claim that the Trump and Melania coins have real-world utility or use cases – but then, no one ever claimed this.

Check the X posts shown above, and you’ll see that Donald’s and Melania’s accounts both explicitly stated that these are meme coins. Unsophisticated traders might miss this point, but they shouldn’t.

These tokens aren’t intended to facilitate cross-border transactions or empower the unbanked in Latin America or Africa. Much like the Doge Coin and Shiba Inu meme tokens, these presidential meme coins are just meant for traders to “Have Fun,” as it states in Trump’s X posting.

Granted, it’s not much fun for anyone who over-invested in the Trump token and got caught on the wrong side of the trade:

Courtesy: @CryptoMarkETH

The Trump and Melania cryptocurrencies both spiked and crashed, but that’s to be expected with meme coins. Anyone who lost substantial amounts of capital on these coins needs to understand the importance of proper position sizing.

To put it simply, the more volatile and risky an asset is, the smaller the position size I would use. And at the end of the day, if you can’t afford to lose money on a trade, then you don’t have to make the trade.

Just as there are blue-chip stocks, I’d say there are blue-chip cryptocurrencies, but only a few of them. The most obvious blue-chip cryptocurrency would be Bitcoin, the market cap of which just crossed above $2 trillion.

Amazingly, the Bitcoin market cap’s compound annual growth rate (CAGR) has been 97%. In other words, not every cryptocurrency is a meme, and we can separate our opinions of meme coins from Bitcoin.

Meanwhile, Trump’s administration is already moving toward a less restrictive regulatory framework for tokenization. Not long ago, Trump set up a cryptocurrency task force to “draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously.”

And of course, Trump appointed a dream team of crypto-friendly cabinet picks, including Paul Atkins to replace Gary Gensler as chairman of the SEC. Hence, Trump isn’t only becoming the Crypto President by launching a meme coin.

The point is that meme coins, presidential or otherwise, aren’t meant to be taken too seriously and investors shouldn’t over-allocate into any of them. Treat them like a trip to Las Vegas: if you fully expect to lose money, the experience will be much more enjoyable.