Is it a joke? No, it is a Trump-backed memecoin worth $12bn

A cryptocurrency launched by President Donald Trump scaled dizzying heights within hours of his inauguration, soaring past $12 billion in market valuation and putting the spotlight back on the opaque and often bizarre world of what is known as "memecoin".

Trump's "memecoin", also known as $TRUMP, rose from less than $10 on Saturday morning to as high as $74.59 before giving up some of its huge rise on Monday.

Melania Trump also joined the frenzy, launching her own token, $MELANIA, valued at over $1 billion.

Experts see the rise of these tokens as both a symbol of Trump’s influence and a controversial step into the unregulated world of memecoins.

What are memecoins?

Nurullah Mahmut Dundar, a blockchain lecturer at Istanbul Medipol University, explains that memecoins are often launched without significant utility —unlike other cryptocoins like Bitcoin or Ethereum, relying on trends or influential endorsements to gain value.

He explains that memecoins are cryptocurrencies often created as jokes, for entertainment, or to generate value, typically backed by a community or individual.

"Their prices depend on hype, speculation, and social media influence, making them highly volatile and unpredictable," Dundar tells TRT World.

The most well-known memecoin, Dogecoin, originated as a joke but gained traction after the world’s richest man, Elon Musk, dubbed it "the people’s crypto."

Similarly, $TRUMP’s success comes from his widespread base of followers and his ability to galvanise his supporters into financial action.

"Melania Trump’s token launch showcases how such cryptocurrencies thrive on popularity rather than solid economic fundamentals," Dundar says, referring to factors like community support, social media trends, celebrity influence, and supply-demand dynamics.

'Very special Trump community' or a 'scam'?

Trump’s embrace of cryptocurrency reflects an ironic reversal from his previous stance.

In 2021, he called Bitcoin a "scam" and criticised its potential to undermine the US dollar’s dominance​.

Yet, $TRUMP’s success has reportedly boosted his net worth significantly, with estimates suggesting gains exceeding $43 billion from its launch.

Furthermore, the launch of $TRUMP coincided with Trump’s promises to deregulate the cryptocurrency industry, bringing accusations of self-serving policymaking.

"This may represent the single worst conflict of interest in the modern history of the presidency," Norman Eisen, a former ethics adviser in the Obama administration, told the Washington Post. Trump has "the most profound conflict of interest" in the crypto space, Eisen added, claiming that the President was "seeking to gain" and regulate the industry.

Four-fifths of Trump coin's tokens are owned by CIC Digital, an affiliate of Trump's business, and another entity called Fight, Fight, Fight, according to its website.

The name "Fight Fight Fight" references Trump’s raised-fist call to his supporters after a failed assassination attempt last year, making the token’s branding as controversial as its market practices.

It says the coins are "an expression of support for, and engagement with, the ideals and beliefs embodied by the symbol '$TRUMP' and are not an investment or security.

Critics argue that this level of concentration in ownership creates an uneven playing field, leaving regular investors vulnerable to price swings dictated by insiders.

"Trump owning 80 percent and timing [the] launch hours before inauguration is predatory and many will probably get hurt by it," said Nick Tomaino, a venture capitalist, on X.

On Tuesday, when Trump was reminded by a reporter that he may have made billions off of his meme coin, the president laughed it off.

"That’s peanuts for these guys," he said, referring to the tech billionaires gathered to help him announce a new artificial intelligence initiative.

'Pump and dump'

The allure of memecoins for investors lies in their unstable price fluctuations.

But, Dundar points out, they are often characterised by "low liquidity" — meaning there aren’t enough buyers and sellers actively trading to stabilise prices — making them particularly "susceptible to price manipulation."

"These types of manipulative actions undermine overall trust in the market because investors start believing prices are dictated by artificial interference rather than genuine supply-demand dynamics," he warns.

Such scenarios often play out in "pump and dump" schemes, a tactic frequently seen in high-risk markets.

In this approach, manipulators first artificially inflate the price of an asset by creating hype and encouraging others to buy in. As prices surge, many investors, fearing they might miss out, rush to purchase.

Once the value reaches its peak, the manipulators sell off their holdings, triggering a quick crash that leaves the majority of investors with significant losses.

This pattern not only leads to severe financial losses for small investors but also damages trust in emerging financial technologies like cryptocurrencies.

"Memecoins might look entertaining, but it is wise to approach these assets cautiously and think twice before investing in them with no economic foundation," Dundar adds.