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Why The Official Trump Cryptocurrency Is Skyrocketing
Last Friday, Donald Trump announced the launch of his new cryptocurrency, Official Trump (CRYPTO: TRUMP). The meme coin has gotten off to an explosive start. As of 10:30 a.m. ET on Monday, the token was up 647.4% since its launch late last Friday night.
The token's price rocketed higher upon its debut and then saw some volatile trading over the weekend amid trends for the broader crypto market and investors taking profits on big short-term gains. The cryptocurrency is actually down 10.1% over the last 24 hours of trading as of this writing, but it's clearly gotten off to a strong start.
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Trump makes waves with new cryptocurrency
On Jan. 17, Trump posted a message to Truth Social unveiling his new cryptocurrency. Truth Social is a social media platform owned by Trump Media & Technology, which formerly had Trump as its majority shareholder before his stock was transferred into a revocable trust that lists him as the sole beneficiary.
Trump wrote post announcing the coin, "My NEW Official Trump Meme is HERE! It's time to celebrate everything we stand for: WINNING!" Some investors are betting Trump's support of the token and high-profile nature will help power huge returns.
On the heels of its big post-reveal gains, Official Trump now has a market capitalization of roughly $10.4 billion. Melania Trump also debuted her own cryptocurrency yesterday. Official Melania Meme has also seen strong bullish momentum out of the gate and now has a market cap of roughly $1.6 billion.
What comes next for the Official Trump cryptocurrency?
Trump's election win and upcoming inauguration have coincided with big gains for some stocks and cryptocurrencies. For example, XRP has seen its token price surge roughly 444% higher over the past three months due to expectations that the Securities and Exchange Commission (SEC) under the new Trump administration could drop a securities violation case against Ripple Labs, the cryptocurrency's creator.
The Trump administration appears poised to usher in new levels of support for the cryptocurrency industry. In addition to easing regulations and enforcement scenarios in the space, the president-elect is also said to be considering the creation of a U.S. strategic cryptocurrency reserve.
But while the new political environment could create some significant bullish catalysts for the crypto market, meme coins continue to be risky investments characterized by high levels of volatility. Trump's extremely high visibility and personal brand strength could help send the Official Trump coin even higher, but investors should understand that the potential for explosive gains also comes with a very high level of risk.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends XRP. The Motley Fool has a disclosure policy.
