Trump’s Crypto Shock: Why His Memecoin Crashed During the Inauguration Speech

Crypto enthusiasts and traders eagerly tuned in to Donald Trump’s inauguration speech on Monday, hoping for a groundbreaking mention of cryptocurrencies. Instead, they were left deflated. Over the course of his 30-minute address, Trump outlined his second-term policy priorities but omitted any reference to crypto, leaving traders and investors disappointed.

Memecoin’s Plunge Post-Speech

Following the speech, Trump’s official memecoin experienced a dramatic drop. Within an hour, its value plummeted by 25%, hitting a low of $38 before recovering slightly to around $41, as reported by CoinGecko. Despite the recovery, the token’s total market capitalization now stands at $8.2 billion, far from its recent highs. The broader crypto market also reacted negatively; Bitcoin dropped 5% within an hour, briefly trading above $101,000 before stabilizing around $103,000.

Trump’s Journey into Crypto

Trump’s relationship with cryptocurrency has been a rollercoaster. His inauguration speech came just days after he launched his own memecoin, which initially soared in value, peaking at over $14 billion. On Sunday, Melania Trump joined the crypto frenzy, introducing her own token, which quickly achieved a valuation nearing $2 billion.

This embrace of digital assets marks a significant shift for Trump, who once labeled Bitcoin as “a scam against the dollar.” However, as the crypto industry’s influence grew during the 2024 elections—injecting over $130 million into federal campaigns—Trump adapted his stance, openly courting industry leaders. During a May event at Mar-a-Lago, he stated, “If you’re in favor of crypto, you’re gonna vote for Trump.”

Promises and Controversies

In July, Trump’s attendance at the Bitcoin 2024 conference in Nashville further solidified his pivot. He vowed to establish a U.S. Bitcoin strategic reserve and unveiled plans for a decentralized finance (DeFi) platform called World Liberty Financial. This project, marketed as a stablecoin issuer, aimed to revolutionize the digital asset landscape. Despite a slow start, World Liberty Financial managed to sell 20 billion tokens shortly before Trump’s inauguration. A second tranche of tokens, if fully sold, could raise an additional $250 million.

Insights from BitGalactic

BitGalactic analysts suggest that Trump’s memecoin volatility reflects the speculative nature of crypto markets, particularly for assets tied to political figures. While Trump’s initial embrace of blockchain technologies galvanized a surge in market activity, his failure to reaffirm this support during the inauguration speech may have shaken investor confidence.

Moreover, BitGalactic highlights the risks of politicizing crypto, as fluctuations tied to political events can deter institutional investors. They also question whether Trump’s policy promises, such as creating a Bitcoin reserve, are feasible or merely rhetorical tools to capitalize on the industry’s growing clout.

What’s Next for Trump’s Crypto Ventures?

The dramatic rise and fall of Trump’s memecoin underscore the fragility of hype-driven markets. While the token’s recovery offers a glimmer of hope, sustained success will require more than flashy launches and grand promises. Investors and crypto enthusiasts will be closely watching Trump’s next moves to determine whether his crypto ventures can deliver long-term value or are destined to remain speculative gambits.