Three days before his inauguration as the 47th President of the United States, Donald Trump made a move that stunned both political and financial analysts—he launched his own meme coin, $Trump. The digital asset, which was made available to the public, saw an extraordinary surge from $7 to $75 per coin in just 24 hours, according to crypto price-tracking platform CoinMarketCap. However, the excitement was short-lived, as its value soon plummeted to around $40—coinciding with the launch of $Melania, a meme coin introduced by incoming First Lady Melania Trump. Even Pastor Lorenzo Sewell, who presided over Trump’s inauguration ceremony, entered the market with his own digital token, $Lorenzo, further fueling the speculative frenzy.
What Are Meme Coins?
Meme coins are digital assets inspired by internet trends or viral content. Unlike traditional cryptocurrencies such as Bitcoin, which operate on their own blockchain networks, most meme coins function as “tokens” built on existing blockchain infrastructure. According to Simon Peters, a crypto analyst at trading platform eToro, the best-known example is Dogecoin, which was created in 2013 as a lighthearted joke featuring a Shiba Inu dog. While Dogecoin has a dedicated blockchain, many newer meme coins require minimal technical development, making them easy to create.
The primary appeal of meme coins is speculation. Investors buy them hoping their value will skyrocket, allowing them to cash out quickly. With millions of such tokens in circulation, the market is saturated with assets that offer little beyond short-term hype and volatile price swings.
High Risks and High Rewards?
Despite the allure of quick riches, the vast majority of investors end up losing money. Meme coins are notoriously unstable and frequently fall victim to “pump and dump” schemes, where creators amass large amounts of tokens, generate online hype to inflate prices, then sell off their holdings—causing the market to crash. Carol Alexander, a finance professor at Sussex University, warns that due to the largely unregulated nature of the crypto market, investors have little protection against such practices.
Still, this has not deterred enthusiasts. The past year has seen an explosion in meme coin popularity, reminiscent of the NFT boom that saw digital artwork selling for millions. Alexander attributes this phenomenon to broader social factors, particularly among younger investors seeking rapid financial gains. “Young men, disillusioned, wanting to try and get rich quick,” she says.
A Market Driven by Internet Culture
The subject matter of meme coins often mirrors online subcultures and internet humor. Many of the most popular tokens are based on dog breeds, cartoon characters, or niche internet memes. The alt-right-affiliated Pepe token, the hyper-masculine Gigachad coin, and even the infamous $Hawk token—launched by viral sensation Hailey Welch, better known as “hawk tuah girl”—are all part of this digital gold rush. Yet, as quickly as they rise, many of these tokens collapse. Welch’s $Hawk token, for example, lost 95% of its value shortly after launch.
The Bitcoin vs. Meme Coin Debate
While meme coins are technically a subset of cryptocurrency, they have little in common with Bitcoin’s original purpose. Mike Hearn, an early Bitcoin developer, argues that meme coins have strayed far from the initial vision of decentralized finance. “They’re basically a form of gambling—kind of a more amped-up version of the stock market, but with less connection to anything concrete,” he explains.
The Bizarre Case of AI-Driven Crypto Investing
One of the most peculiar stories in the meme coin saga involves New Zealand-based artist Andy Ayrey, who trained an AI language model and launched an X account called @truth_terminal. The AI, which lacked social awareness, became fascinated with meme coins after engaging with crypto-related accounts. A stranger—unbeknownst to Ayrey—created a Goatse-themed token based on the bot’s posts, and its market value skyrocketed to over $1.2 billion. The AI later promoted another token, Fartcoin, which peaked at $2.3 billion in market capitalization. Despite these eye-watering valuations, Ayrey quickly realized that the liquidity issue made it difficult to cash out. “The more people get angry about it, especially in traditional finance, the more people think Fartcoin is funny and Fartcoin goes up,” he notes.
Who Really Profits from Meme Coins?
The primary beneficiaries of the meme coin craze are not retail investors but institutional traders employing sophisticated strategies to exploit price fluctuations. “All the big professional traders are making billions out of this, and ordinary people are losing their money,” Alexander states.
As for Trump, his foray into meme coins appears to serve a dual purpose. Beyond pure speculation, $Trump operates similarly to a “fan token,” with supporters buying in as a show of allegiance. However, concerns about conflicts of interest have surfaced, as Trump owns entities that collect trading fees from the coin’s transactions. Alexander believes the move is more symbolic than financial: “It’s just showing that he can do this sort of thing. He can do whatever he likes, and he knows it.”
