Bitcoin Surges as Trump Memecoins Shake Crypto Markets
Bitcoin (BTC-USD) reached a record high as the United States prepares for Donald Trump's second presidential inauguration, following a weekend where his own digital token caused ripples in the crypto markets.
On Monday, Bitcoin surged by 5.5% to reach $109,241. The rally occurred after Trump and his wife, Melania, launched memecoins, with Trump's coin reaching a market capitalization of over $15 billion on Sunday before experiencing a sharp decline.
Other major tokens, including Ether and XRP, also witnessed a surge on Monday, with traders anticipating Trump's return to power. Bloomberg News previously reported that Trump is considering designating digital assets as a "national priority" through an executive order.
The initial launch of the Trump memecoins surprised crypto markets, diverting investments from other tokens and drawing criticism from industry executives. However, investors eventually embraced the belief that Trump's move would incentivize him to adopt crypto-friendly policies.
During his campaign, Trump became a vocal supporter of the digital assets industry, reversing his previous stance of branding Bitcoin as a scam. He promised to establish the US as a crypto capital through measures such as creating a strategic Bitcoin stockpile.
Memecoin Mania and Bitcoin's Momentum
The tokens released by Trump and his team have accelerated Bitcoin's momentum, as retail traders anticipate his administration to "prioritize and reaffirm its commitment to the crypto industry," said Ben El-Baz, managing director of HashKey Global.
Memecoins, a class of cryptocurrency with often questionable value and high volatility, rely on social media hype to drive their price. Trump's token temporarily shook the digital asset market on Monday in Singapore, diverting investments from Bitcoin and other tokens. However, industry experts and government watchdogs alike voiced concerns about its legitimacy.
According to the Trump memecoin website, 80% of the tokens are held by a Trump Organization affiliate, CIC Digital LLC, and a related entity named Fight Fight Fight LLC. The tokens will be gradually released over a three-year period.
Major Exchanges and Listings
Major cryptocurrency exchanges such as Coinbase Global Inc. and Binance Holdings Ltd. announced their intention to list the Trump memecoin. Robinhood Markets Inc. also announced that it had listed the token.
Jonathan Yark, senior quantitative trader at Acheron Trading, stated that the memecoin "confirmed that digital assets, and particularly Bitcoin, will have the backing of the US, which presents significant opportunities."