Trump’s Memecoin Frenzy: A Gateway for New Solana Users or a Risky Gamble?

Trump Memecoins Draw First-Time Solana Users, But Whales Hold the Cards

Almost half of the buyers of Donald Trump’s controversial memecoin—dubbed TRUMP—were first-time users of the Solana blockchain. This trend, highlighted by blockchain analytics firm Chainalysis, sheds light on the buying behavior of those who jumped into the memecoin craze following its launch.

“Nearly half of buyers created their wallets on the same day they purchased the tokens,” Chainalysis shared in a post on X (formerly Twitter). Additionally, around 50% of wallets holding TRUMP or MELANIA tokens have never interacted with other Solana-based assets, apart from SOL and stablecoins like USDC.

The memecoin’s launch, coming just days before Trump’s inauguration, surprised many in the crypto industry. Critics have labeled it a cash grab, warning that celebrity-backed tokens may erode the already fragile credibility of the crypto market. Cameron Chisholm, a developer for crypto investment app Token.com, described these types of memecoins as “vehicles for gambling” and “grifts” that harm the broader space.

Retail Dominance, But Whales Reap the Rewards

Despite the skepticism, TRUMP’s memecoin has attracted significant attention. Onchain data from GeckoTerminal reveals over 782,000 wallets hold the token. Most of these wallets hold less than $100 worth, with 80% belonging to retail investors who hold under $1,000 in Solana-based assets.

While smaller traders dominate in sheer numbers, they’re not the ones profiting the most. Chainalysis reported that 60 whale wallets—large entities holding substantial amounts of crypto—have collectively netted over $10 million from TRUMP trades. Moreover, just 40 whale wallets hold a staggering 94% of the total supply of TRUMP and MELANIA tokens.

BitGalactic’s Take: A Risky Game of Memecoins

From BitGalactic’s perspective, the Trump memecoin story reflects both the allure and dangers of memecoin investing. For new users entering the crypto market, celebrity associations may provide a false sense of legitimacy. However, the volatility and concentration of wealth in a handful of whale wallets reveal the inherent risks.

BitGalactic highlights that memecoins like TRUMP and MELANIA serve as speculative vehicles with high risks. Retail investors may flock to these tokens hoping for quick gains, but the wealth disparity between everyday users and whales suggests that profits are heavily skewed toward the few who dominate the market.

From Boom to Bust

In its initial days, the TRUMP token reached a market cap of $15 billion, a meteoric rise fueled by hype. However, its value halved after Melania Trump introduced her own memecoin, siphoning traders from TRUMP. Adding to the decline, Trump’s failure to mention cryptocurrency in his inauguration speech dampened enthusiasm.

Despite the slump, TRUMP remains the third-largest memecoin by market cap, trailing only Dogecoin ($51 billion) and Shiba Inu ($11 billion). However, its extreme volatility underscores the risks of the memecoin market, where hopeful investors often face significant losses.

Closing Thoughts

While Trump’s memecoin may be a gateway for first-time Solana users, it also highlights the speculative nature of memecoins and the wealth disparity within the crypto market. Retail investors are advised to approach these assets cautiously, as the combination of volatility and centralized holdings often tilts the odds in favor of whales.