Donald Trump Memecoin: What you Need to Know From an IT Expert

Lately, I’ve been receiving many questions from people unfamiliar with cryptocurrency about Donald Trump’s new memecoin, the Trump memecoin, $TRUMP. This coin has sparked excitement and controversy, and it’s clear that many don’t fully understand what they’re buying. In this blog, I break down what you need to know to make an informed decision. 

Scams to Avoid

It’s crucial to be cautious of scams. Whenever something new dominates the news, scammers are quick to exploit the hype. Reports have surfaced about email and social media scams claiming to offer discounted access to $TRUMP, easy purchases with credit cards or via various payment apps.  There are also a lot of fake and unofficial coins with similar names that have been created.  

Keep in mind that the Trump memecoin is only available on reputable cryptocurrency exchanges, with Coinbase being the most popular in the U.S. If you decide to invest, ensure you’re using a trustworthy exchange and always verify the official website before making any transactions to avoid falling for fake or phishing sites. 

It’s also worth noting that even some large, well-known exchanges have collapsed in recent years, resulting in significant losses for their users. That’s why you should never invest more than you can afford to lose.

What Are Memecoins?

Memecoins represent only a small portion of the cryptocurrency industry. While many cryptocurrencies are designed for practical use — such as digital payments or automating financial processes through smart contracts — memecoins primarily exist as a way for communities to show support and enthusiasm. Because they often lack real-world utility, they are commonly referred to as “shitcoins” within the crypto industry.  

In the case of $TRUMP, the primary aim appears to be generating profits for insiders and offering supporters a novelty item to trade rather than providing real utility.

Market Outlook

When the coin launched, 10 percent was held by insiders and only an additional 10 percent was sold to the public.  At three months from launch, additional coins held by insiders will start to be unlocked and could be sold at that point.  

Usually, coin prices decline when sales happen because of the additional supply that hits the market.  Over the course of three years, all of the coins held by insiders will be unlocked and can be sold, so it is expected that the value of the coin will continue to decline over that time, since the amount of coins available will increase from 200 million to over 999 million.  Like anything, when supply increases without demand also increasing, the price declines.

It’s obvious that the Trump memecoin is currently held by a lot of speculators, and that the price will be volatile.  Just a couple of days after $TRUMP launched, $MELANIA launched, and within minutes of that announcement, $TRUMP fell by over 55 percent.  Like $TRUMP, only 20 percent of the $MELANIA coin supply is available, but the lockup period on $MELANIA is only 13 months, with the first unlock occurring in 30 days.  As of the writing of this blog, the price is down 50 percent from what it launched at.  

If you were lucky enough to get into $TRUMP at a lower price, and are now looking to sell for a profit, keep in mind that you will be subject to short-term capital gains tax.

Community and Industry Reactions

Supporters of the memecoin argue that Trump’s foray into cryptocurrency is a bold endorsement of the digital economy. They believe that his massive following and influence could bring legitimacy to the memecoin sector. 

On the other hand, critics worry about conflicts of interest, given his potential future political ambitions and the lack of regulatory oversight in the crypto space. Ethics experts have raised alarms over the unprecedented nature of a sitting U.S. president launching a personal financial asset.

My concern is that this will attract a lot of new people to dabble in cryptocurrency, resulting in them having a bad experience because they will lose money.  That means in the future, they will be less likely to use or invest in worthwhile cryptocurrency projects.

Takeaways on the Trump Memecoin

The launch of the $TRUMP memecoin has certainly captured global attention, but its long-term viability remains uncertain. Whether it becomes a lasting financial asset or fades as a speculative trend, investors should exercise caution. Always conduct thorough research, invest responsibly and remain vigilant against potential scams.

For more information on cybersecurity for your organization, contact us.