I. Introduction

1.1 Research Background and Objectives

In recent years, the cryptocurrency market has captured global attention with its rapid development and significant influence. From the birth of Bitcoin, which marked the beginning of a new era of decentralized digital currency, to the current circulation of thousands of cryptocurrencies in the market, crypto has evolved from a fringe financial concept into an increasingly important part of the global financial system.

The emergence of TrumpCoin has occurred against this backdrop of a booming yet controversial and uncertain cryptocurrency market. Donald Trump, as one of the most influential political figures in the United States, has always been under the spotlight for his actions and statements. His entry into the cryptocurrency space, particularly with the launch of TrumpCoin, instantly became a focal point in both global financial and political circles. TrumpCoin, issued based on Trump’s personal influence and brand value, has been surrounded by debate and controversy from the moment it was introduced. It has not only attracted widespread investor attention regarding its value and prospects but has also prompted regulators, scholars, and market participants to reflect deeply on the policy implications and market impact behind its creation.

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2. Overview of Trump Coin

2.1 The Birth and Development of $TRUMP

TrumpCoin was born amidst a complex backdrop where politics and finance are deeply intertwined. On January 18, 2025, Donald Trump officially announced on his social media platform the launch of his personal meme coin — TrumpCoin (TRUMP). This announcement immediately caused a global stir. From the moment the concept was introduced, TrumpCoin was imbued with a strong personal and political significance. Its official website describes it as “the only official Trump meme,” emphasizing its uniqueness and authority.

In its early stages, TrumpCoin showed rapid growth. According to data from CoinGecko, on the day of its launch, TrumpCoin’s market capitalization quickly soared to $4 billion, ranking fourth among all meme coins, with its price surging more than tenfold in a single day. When Huobi listed the TRUMP token, its price at one point surged by 1,250%, reaching 21 USDT. This remarkable market performance was driven not only by Trump’s global notoriety and massive fan base but also by the cryptocurrency market’s extreme sensitivity to fresh concepts and trending events. Investors rushed in, hoping to achieve high returns from this emerging digital asset.

However, this boom was short-lived, as TrumpCoin’s price soon experienced dramatic fluctuations. After peaking, the price began to decline sharply. On February 4, Fortune magazine reported that the trading price of TrumpCoin on February 3 was around $19, approximately 75% lower than its all-time high reached on the eve of Trump’s inauguration. This significant price volatility was partly due to excessive market speculation, with the initial price surge driven more by hype than by any fundamental value. Additionally, there was considerable uncertainty surrounding TrumpCoin’s future development, and as the initial excitement faded, investors began reassessing its long-term investment value.

Shortly after the launch of TrumpCoin, on January 19, 2025 (Eastern Time), Trump’s wife, Melania Trump, announced the launch of her own cryptocurrency — MelaniaCoin (MELANIA). This development further complicated the market dynamics. The introduction of MelaniaCoin had a direct impact on TrumpCoin’s price, causing notable price fluctuations following her announcement. The phenomenon of family members successively issuing cryptocurrencies is extremely rare in the history of the crypto market and has sparked widespread speculation about the Trump family’s broader strategy and intentions within the cryptocurrency space.

2.2 Basic Features and Technical Principles

As a meme coin, TrumpCoin possesses distinctive characteristics. Meme coins are typically digital currencies created based on internet culture trends, popular images, or current events, with their value deriving more from community consensus and market speculation rather than traditional economic fundamentals or technological innovation. TrumpCoin, leveraging Donald Trump’s political influence and widespread public attention, has become a typical example of a meme coin.

In terms of issuance, the mechanism behind TrumpCoin is quite controversial. According to information from its official website, 80% of the token’s supply is held by an entity called “Fight Fight Fight,” jointly owned by Trump’s company CIC Digital and CIC. Initially, only 200 million tokens were available for trading, with plans to issue up to 1 billion TrumpCoins over the next 36 months. This highly concentrated ownership structure gives the Trump family significant control over the coin’s value, raising concerns in the market about potential price manipulation.

On a technical level, TrumpCoin is built on blockchain technology. The decentralized, immutable, and distributed ledger characteristics of blockchain provide the technological foundation for TrumpCoin. However, compared to mainstream cryptocurrencies like Bitcoin and Ethereum, TrumpCoin lacks notable technical innovation. Bitcoin employs a mining mechanism to enable decentralized currency issuance and transaction validation, while Ethereum introduced smart contracts, expanding blockchain’s use cases. TrumpCoin, by contrast, mainly relies on Trump’s personal brand and the viral power of social media to attract investors and drive trading activity.

In addition, TrumpCoin trading primarily takes place on certain cryptocurrency exchanges, such as the Meteora platform. These exchanges provide trading venues and liquidity support for TrumpCoin, but they also face challenges related to regulatory compliance and security risks. Given that cryptocurrency market regulations are still evolving, the trading of TrumpCoin carries a degree of uncertainty and inherent risk.

2.3 Market Performance and Trading Conditions

Since its launch, TrumpCoin’s market performance has attracted significant attention, with its price movement resembling a roller coaster, full of dramatic fluctuations. In the early stages, fueled by Trump’s celebrity effect and high market interest, the price of TrumpCoin surged rapidly. After going live on January 18 with an opening price of $0.1824, it increased by over 15,000% within 12 hours to around $30, with a peak reaching as high as $75.35. Its market capitalization soared in a short period, reaching an impressive level.

However, this surge did not last long. The price of TrumpCoin soon began to fall sharply. After the launch of MelaniaCoin, the price of TrumpCoin was further impacted, dropping from its high of $75 to below $40, leaving many investors who had bought in at higher prices trapped. The price continued to decline with volatility, and by February 3, it was trading at around $19, representing a drop of more than 75% from its historical high. Such drastic price swings clearly demonstrate the high-risk and speculative nature of the cryptocurrency market.

In terms of trading volume, TrumpCoin experienced a sharp increase shortly after issuance, indicating strong market interest. According to related statistics, during a certain period after listing, its 24-hour trading volume surged by 266.52%, with large amounts of capital flowing into the market, pushing the price upward. However, as prices fell and market enthusiasm faded, trading volumes gradually stabilized.

Several factors influence the price volatility of TrumpCoin. First, Trump’s political actions and statements have a significant impact on the coin’s price. As the core value support of TrumpCoin, any move Trump makes on the political stage can change market expectations about the coin’s future, thereby affecting its price. Second, market speculation is a key driver of price fluctuations. Since TrumpCoin lacks intrinsic economic value or practical use cases, its price is largely dependent on investor sentiment and expectations. Once market sentiment shifts, the price is prone to sharp changes. Additionally, the overall performance of the cryptocurrency market, regulatory policy developments, and the emergence of competing coins also affect TrumpCoin’s price. For example, during a bull market in the broader crypto market, TrumpCoin’s price tends to rise in response; conversely, when regulatory policies tighten or other more attractive investment opportunities appear, investors may sell off TrumpCoin, leading to price declines.

3. Analysis of Crypto Assets Monetary Policy

3.1 Current Status and Trends of Global Cryptocurrency Monetary Policy

At present, countries around the world demonstrate a diverse approach to cryptocurrency regulation. Some countries adopt a proactive and open attitude, regarding cryptocurrency as an innovative financial instrument and seeking to regulate market development through well-structured regulatory frameworks. For example, the United States is at the forefront of cryptocurrency regulation, with multiple regulatory bodies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) overseeing the sector from different perspectives. The SEC primarily focuses on whether cryptocurrencies fall under the category of securities. If classified as securities, they are required to comply with securities-related regulations, including information disclosure and investor protection requirements. The CFTC primarily regulates the cryptocurrency futures and options derivatives markets, aiming to maintain fairness, order, and transparency in the market. Some U.S. states, such as Wyoming, have even formulated laws favorable to cryptocurrency development, offering a more friendly business environment for cryptocurrency companies and attracting numerous blockchain and cryptocurrency enterprises.

European countries are also continuously improving cryptocurrency regulations. The European Union has introduced the Markets in Crypto-Assets Regulation (MiCA), aimed at providing a unified regulatory standard for the issuance, trading, and operation of crypto assets. This regulation imposes strict requirements on the issuance and operation of stablecoins, stipulating that stablecoin issuers must have sufficient capital reserves and risk management mechanisms to ensure their stability and reliability. MiCA also mandates that cryptocurrency trading platforms undergo registration and supervision, strengthening investor protection and preventing fraud and market manipulation. In the United Kingdom, the Financial Conduct Authority (FCA) supervises cryptocurrency-related businesses, requiring crypto enterprises to comply with anti-money laundering and anti-terrorism financing regulations, while also strictly regulating cryptocurrency derivatives trading to protect investors from potential risks.

3.2 Trump’s cryptocurrency policy proposition

Trump has undergone a significant shift in his stance on cryptocurrency policy. During his first presidential term, Trump held a highly critical view of cryptocurrency. In 2019, he tweeted: “I am not a fan of Bitcoin and other cryptocurrencies, which are not money, their value is highly volatile and based on thin air. Unregulated crypto assets can facilitate unlawful behavior, including drug trafficking and other illegal activities.” He also labeled Bitcoin as “seeming like a scam,” with value “based on thin air,” emphasizing that “The United States has only one real currency (the U.S. dollar), which is stronger than ever, dependable, and reliable.”

However, after his first presidential term ended, Trump’s attitude toward cryptocurrency shifted dramatically. After 2022, he began to express optimism regarding the development prospects of cryptocurrencies, stating that Bitcoin and other cryptocurrencies are “like the steel industry 100 years ago, still in their infancy.” He even suggested that “Bitcoin could replace gold” and declared, “We will make cryptocurrency one of the greatest industries on earth.” Additionally, Trump and his family members started investing in and holding cryptocurrencies, further signaling his changed stance.

During the 2024 presidential campaign, Trump put forward a series of policy proposals actively supporting the development of Bitcoin and other cryptocurrencies. He aimed to transform the U.S. into the global capital of cryptocurrency and a Bitcoin superpower. He argued that if the U.S. does not embrace crypto and Bitcoin technology, China and other countries will and could dominate the sector. To achieve this, he proposed establishing a dedicated Presidential Advisory Committee on Bitcoin and cryptocurrency, composed of crypto enthusiasts to design transparent regulatory policies and foster an innovation-friendly regulatory atmosphere. Trump also proposed creating a strategic Bitcoin reserve, positioning the development of the Bitcoin industry as a core part of the national Bitcoin reserve strategy. This indicates a willingness for the U.S. government to directly participate in the digital asset market. He recognized Bitcoin’s value and promised not to sell the government’s Bitcoin holdings, ensuring these assets continue to serve the nation.

Moreover, Trump advocated using cryptocurrency to address the U.S. debt crisis, potentially opening new applications for cryptocurrencies globally. He also vowed to end the Biden administration’s “crackdown” on cryptocurrencies and Bitcoin, protecting the rights to mine and trade Bitcoin while ensuring sufficient electricity supply, aiming to make the U.S. a Bitcoin mining powerhouse. To promote crypto development, Trump plans to dismiss current SEC Chairman Gary Gensler, who imposed strict regulatory controls on crypto activities, and to establish a clear, unified regulatory framework. This framework would cover areas such as stablecoin regulation and user self-custody rights, supporting the safe and responsible expansion of stablecoins and cryptocurrencies. At the same time, he firmly opposes the development of central bank digital currencies (CBDCs), viewing them as threats to individual freedom and market competitiveness. Trump also expressed intent to reduce or commute the life sentence of Ross Ulbricht, founder of the dark web Silk Road, signaling his emphasis on libertarian values within the crypto community.

3.3 The mechanism of policy impact on the cryptocurrency market

Cryptocurrency policies impact the crypto market in multiple ways, primarily through mechanisms such as market entry, investor protection, and market stability.

Regarding market entry, regulatory policies determine the threshold for enterprises and projects to enter the crypto market. Strict entry policies, such as higher requirements for corporate qualifications, technical standards, and financial strength, filter out weaker or non-compliant projects and enterprises, thus improving overall market quality. For instance, some countries require crypto exchanges to obtain specific licenses to operate, prompting these exchanges to enhance their risk management and compliance systems. This approach helps prevent fraudulent projects from entering the market, protecting investors from potential losses. However, overly stringent entry policies could also stifle innovation and prevent promising startups from entering the market. Conversely, more lenient entry policies may attract more participants, fostering competition and innovation, but they also increase market risks, such as a proliferation of low-quality projects and scams.

Investor protection is a key objective of cryptocurrency policy. Regulatory policies require crypto projects to fully disclose information so investors can understand project fundamentals, including technical principles, business models, and risk factors, enabling more informed investment decisions. For example, regulators may require disclosure of team member backgrounds, fund usage, and technical details to prevent misleading investors. Additionally, policies regulate trading behavior, cracking down on insider trading and market manipulation to maintain fairness and transparency. When investors believe the market is fair and transparent and that their interests are protected, they are more likely to participate, contributing to healthy market development.

Market stability is another major focus. The inherent volatility and uncertainty in crypto markets can pose systemic risks to financial stability. Regulatory policies maintain market stability by limiting trading leverage to prevent excessive borrowing and reduce risk. For instance, setting maximum leverage ratios for crypto futures trading helps investors avoid catastrophic losses during market swings and prevents chain reactions. Furthermore, regulators monitor and issue early warnings regarding market risks using big data and AI technologies. They analyze abnormal fluctuations and issue timely warnings, taking measures to stabilize the market. Clear policy communication also guides market expectations and reduces panic due to policy uncertainty.

3.4 Potential Risks and Opportunities in the Crypto Assets Market under Trump’s Policies

Trump’s crypto policies present both risks and opportunities for the cryptocurrency market.

On the risk side, regulatory arbitrage is a significant concern. Trump’s push for regulatory relaxation could lead companies to exploit regional policy differences for lower regulatory costs and higher profits. Some crypto enterprises may shift operations to more lenient jurisdictions to avoid strict oversight, undermining regulatory effectiveness and potentially disrupting market order, increasing investor risks.

Increased market volatility is another concern. Uncertainty surrounding Trump’s policies could trigger large fluctuations in market sentiment, causing sharp price swings in cryptocurrencies. Proposals such as forming a Bitcoin advisory committee or dismissing the SEC chairman might generate speculation and uncertainty, affecting investor confidence and intensifying market instability.

Additionally, greater government intervention—such as through a strategic Bitcoin reserve—might introduce new risks of market manipulation. If these policies are implemented without transparency and oversight, certain interest groups could exploit them, manipulating prices to their advantage and harming retail investors.

On the opportunity side, a more relaxed regulatory environment could spur innovation. Crypto enterprises would have more freedom to innovate in technology and business models, driving sectoral growth. Areas like DeFi (decentralized finance) and NFTs (non-fungible tokens) could see more rapid development under these conditions.

Investment opportunities would also increase. Trump’s goal of making the U.S. the global crypto capital could attract substantial capital inflows. Institutional investors, encouraged by government support, may increase allocations to crypto assets. Likewise, retail investors could show greater interest, bringing more funds and liquidity into the market.

4. Market Dynamics Analysis

4.1 Development Trend of the Crypto Assets Market

In recent years, the cryptocurrency market has shown continuous expansion in scale and increasing trading activity. In terms of market size, by the end of 2024, the total global cryptocurrency market capitalization surpassed USD 3 trillion, marking an approximate 50% increase compared to the previous year. Bitcoin, as the cryptocurrency with the largest market cap, accounted for over 40% of the total. After experiencing significant volatility throughout 2024, Bitcoin’s price stabilized above USD 60,000 by the end of the year, with a gain of over 80% from the beginning of the year. Ethereum, representing the leading smart contract platform, accounted for around 20% of the total market cap, with its price steadily rising alongside overall market recovery.

In terms of trading activity, the average daily trading volume of global cryptocurrencies in 2024 exceeded USD 50 billion, reflecting a 30% increase from the previous year. Cryptocurrency exchanges played a key role in this trend. Well-known exchanges such as Binance and Huobi maintained substantial daily trading volumes. At the same time, the market share of decentralized exchanges (DEXs) has been steadily increasing. The trading volume of DEXs rose from less than 5% a few years ago to approximately 15% by 2024, driven by their privacy protection, autonomy, and freedom from third-party intermediaries, which continue to attract more investors.

The performance of mainstream cryptocurrencies varied. Bitcoin, as the market bellwether, had price movements that heavily influenced the entire market. In 2024, Bitcoin’s price increases were primarily driven by supply-demand dynamics, the macroeconomic environment, and investor sentiment. On one hand, the increasing mining difficulty and slowing issuance rate stabilized Bitcoin’s supply; on the other hand, growing institutional participation led to sustained demand. Ethereum, powered by its smart contract technology, continued to expand its ecosystem, driving growth in decentralized finance (DeFi) and non-fungible tokens (NFTs), which in turn contributed to price appreciation. Other leading cryptocurrencies such as Ripple (XRP) and Litecoin (LTC) also demonstrated fluctuations in price according to their own fields and the overall market environment.

4.2 The Impact and Influence of Trump Coin on the Crypto Assets Market

The launch of TrumpCoin caused significant upheaval in the cryptocurrency market, influencing capital flows across the sector. In the early stage of TrumpCoin’s release, massive capital quickly flowed into the coin, spurred by the celebrity effect of Donald Trump and heightened market attention. According to statistics, within the first week after its launch, TrumpCoin attracted over USD 1 billion in capital, primarily from other cryptocurrency investors and traditional financial markets. Many investors sold off other cryptocurrencies to chase short-term profits from TrumpCoin, resulting in price declines for mainstream cryptocurrencies like Bitcoin and Ethereum. For example, within days of TrumpCoin’s launch, Bitcoin’s price fell by around 5%, and Ethereum’s by approximately 8%.

The price volatility of TrumpCoin also triggered ripple effects on the prices of other cryptocurrencies. As a meme coin, TrumpCoin’s price was driven more by market sentiment and speculation, leading to extreme fluctuations. When TrumpCoin’s price surged, investor optimism spread across the market, boosting prices of other cryptocurrencies. Conversely, price drops in TrumpCoin induced widespread panic, prompting sell-offs across the market and causing other cryptocurrencies to fall as well. This price linkage effect amplified overall market volatility. For instance, after the launch of MelaniaCoin, TrumpCoin’s price plunged sharply, leading to panic-induced sell-offs throughout the crypto market, with significant corrections in Bitcoin and Ethereum prices.

Market confidence was also impacted. On one hand, the successful launch of TrumpCoin increased attention and acceptance toward cryptocurrencies, attracting new investors — especially those previously hesitant — who viewed Trump’s involvement as a sign of greater market potential. On the other hand, TrumpCoin’s extreme price swings and potential risks of price manipulation led some investors to question the stability and reliability of the crypto market. In particular, when TrumpCoin experienced large price drops causing major investor losses, negative sentiment emerged, dampening confidence. Some investors expressed that TrumpCoin’s price movements made them acutely aware of the risks in cryptocurrency investing, prompting them to become more cautious in the future.

4.3 Analysis of Market Participants’ Reactions and Behaviors

Investor responses to TrumpCoin were polarized. Some investors, primarily Trump supporters or risk-seeking speculators, showed great enthusiasm and actively participated in the coin’s trading. They believed TrumpCoin’s brand and celebrity influence carried massive upside potential. In the early days after its launch, these investors rushed to buy in, contributing to rapid price increases. Statistics show that the number of new investor accounts surged in the first few days after TrumpCoin’s release, with many of these new users entering the market solely for TrumpCoin.

On the other hand, more conservative investors remained cautious, viewing TrumpCoin as lacking fundamental economic value, with prices driven largely by hype and speculation, and posing high risks. These investors preferred stable, mainstream cryptocurrencies like Bitcoin and Ethereum, which have real-world use cases and technological foundations. Veteran cryptocurrency investors publicly stated they would not invest in TrumpCoin, instead focusing on more stable opportunities in established assets.

The reaction among crypto-related enterprises was also mixed. Smaller companies saw TrumpCoin as a market opportunity and quickly formed partnerships to leverage its popularity. Some crypto exchanges rapidly listed TrumpCoin trading pairs, boosting platform traffic and revenues. Certain blockchain development firms expressed willingness to offer technical support to help TrumpCoin improve its infrastructure and enhance transaction security and efficiency.

In contrast, larger crypto companies took a more cautious stance, prioritizing brand image and market credibility. These companies worried that TrumpCoin’s controversial nature might harm their reputations. For example, some well-known crypto wallet providers stated that they would not support TrumpCoin unless it demonstrated legal compliance and strong market potential.

Regulatory bodies paid close attention to TrumpCoin and implemented measures to mitigate risks. Given the involvement of financial regulation, anti-money laundering, and investor protection issues, regulators feared TrumpCoin could trigger financial instability. Some countries required exchanges to conduct stringent reviews of TrumpCoin trading, ensuring legal compliance. The U.S. Securities and Exchange Commission (SEC), for instance, launched an investigation into the TrumpCoin project, demanding detailed disclosures to protect investors. Some jurisdictions even banned TrumpCoin trading altogether, citing risks to financial stability.

4.4 Market Future Development Trends Forecast

Based on current market dynamics and policy environments, the cryptocurrency market is expected to exhibit diverse trends in the future.

Firstly, in terms of technological innovation, blockchain technology will continue to evolve, providing stronger support for the cryptocurrency ecosystem. The ongoing Ethereum 2.0 upgrade is a prime example, aiming to significantly enhance the network’s scalability, security, and energy efficiency. By transitioning from the Proof-of-Work (PoW) consensus mechanism to the Proof-of-Stake (PoS) mechanism, Ethereum will greatly improve transaction processing speed and reduce energy consumption. Additionally, emerging blockchain technologies such as sharding and cross-chain interoperability will continue to develop and be applied, further improving the performance and expanding the application scenarios of cryptocurrencies. Sharding technology allows blockchain networks to be divided into multiple shards, each processing transactions independently, thereby increasing the overall throughput of the network. Cross-chain technology will enable interoperability between different blockchains, facilitating the free flow of assets and collaborative development of applications.

The expansion of application scenarios will also become a key trend. Beyond existing fields like payments, investments, and financial derivatives, cryptocurrencies are expected to see broader applications. In the field of supply chain finance, blockchain can enhance transparency and traceability of supply chain information, improving efficiency and security. Enterprises can use blockchain to record transportation, storage, and transaction data, ensuring authenticity and immutability, thereby reducing transaction costs and increasing financing efficiency. In the Internet of Things (IoT) sector, cryptocurrencies can be used for machine-to-machine payments and data exchanges, enabling autonomous management and value transfer between devices. For example, smart home devices can use cryptocurrencies to pay for energy consumption, while smart vehicles can pay for parking fees and charging services using crypto.

Regulatory policies will also have a profound impact on the market. As the cryptocurrency market continues to grow, regulators around the world are expected to strengthen oversight and introduce more comprehensive laws and regulations. Regulatory focus will increasingly emphasize investor protection, anti-money laundering (AML), and counter-terrorism financing (CTF) to maintain financial stability and market order. Some countries may require cryptocurrency exchanges to implement strict Know Your Customer (KYC) and AML verification processes, with real-time transaction monitoring to prevent illicit funds from entering the market. Regulatory agencies might also standardize cryptocurrency issuance and trading by demanding thorough information disclosure from project teams, thereby increasing market transparency. Looking ahead, global regulatory cooperation is likely to intensify, with regulatory bodies working together to establish unified standards to address the cross-border and decentralized nature of cryptocurrencies.

Finally, the market competition landscape will continue to evolve. As the cryptocurrency market matures, competition will become increasingly fierce. Leading cryptocurrencies will consolidate their positions through robust technological foundations, large user bases, and strong market reputations. Bitcoin and Ethereum will continue to dominate, attracting more investors and developers. At the same time, new crypto projects will continue to emerge, competing for market share through technological innovation and differentiated positioning. Projects with unique technical advantages and application potential — particularly those focused on privacy protection, decentralized storage, and artificial intelligence — may rise to become new market leaders. Furthermore, the market could see an increase in mergers and acquisitions, as companies seek to integrate resources, enhance competitiveness, and drive industry consolidation.

Conclusion

In terms of investment strategy, investors should avoid blindly following market hype and investing in high-risk cryptocurrencies such as “Trump Coins.” Although Trump Coin may experience price surges in its early stages due to celebrity influence and market speculation, such increases are often not supported by real intrinsic value. This leads to extreme price volatility and significant investment risks. Additionally, investors are advised to adopt a diversified investment strategy, spreading their funds across different types and market capitalizations of cryptocurrencies to reduce the risks associated with holding a single asset.