"Make Memecoins Great Again?" The Party of Trump's Meme Coin and the Hidden Worries

On January 18th, Donald Trump, the U.S. President-elect, announced on social media that he was launching his own cryptocurrency meme coin, $TRUMP. The news instantly set off a frenzy in the crypto market. On its first day,$TRUMP’s market value broke through 24 billion, making it the center of everyone’s attention. From normal investors to professional traders, pretty much everyone was super excited about this meme coin that carries a strong Trump vibe.

Meme coins are a type of cryptocurrency inspired by internet culture,known for their high entertainment value and viral spread.They are usually based on popular figures or events,attracting investors more through market hype than actual economic function.From early coins like Dogecoin($DOGE),which became famous thanks to its Shiba Inu mascot and support from influencers like Elon Musk,to more recent ones like $PEPE,meme coins have always thrived on speculative frenzies.

$TRUMP takes this trend to a new level by combining the powerful personal brand with political elements.This unique mix has supercharged the meme coin market,making it hotter than ever.

Trump Gets Involved: Another Big Thumbs-Up for Crypto!

According to Trump’s team, the launch of $TRUMP is all about celebrating a leader who stands strong in tough times. This meme coin isn’t just about Trump’s political image; it also includes the story of his assassination attempt during the 2024 campaign. That adds an emotional layer that really resonates with people. And with Trump’s promises to support the crypto market, investors are super excited about what $TRUMP could bring.

Celebrity-backed meme coins aren’t new. Doge got a huge boost because of its connection to Musk and made it into the top 10 in this bull run. But what makes $TRUMP different is that it’s being launched by Trump himself, as President-elect. It’s a first in both the crypto world and politics.

Trump has been pretty active in crypto. He’s promised to roll out policies that are good for crypto, invested in major cryptocurrencies, and even launched NFTs and a coin called WLFI. Now, with $TRUMP, he’s jumping into the meme coin trend. As the first president to do this, he’s doing something really unique. He’s bringing his political influence directly into the meme coin market. This move not only shows that he’s fully on board with crypto but also helps bring more attention and money into the space. It’s a big thumbs-up for the future of crypto, both in terms of policy and liquidity.

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From Crypto Frenzy to Rational Reflection

However, the meme coin frenzy isn’t just about making money or sending political messages. It also hides some complicated legal risks. With more and more governments paying attention to cryptocurrencies, Trump’s move basically puts crypto under a spotlight for everyone to examine.

First, there’s the question of whether this meme coin is a security. This is super important for its legality. In the U.S., cryptocurrencies issued through ICOs are treated as securities and are strictly regulated by the SEC. The SEC usually uses something called the Howey Test to decide if an asset is a security. It has four parts: investing money, expecting profits, a common enterprise, and relying on the efforts of others. ICOs usually raise money by issuing cryptocurrencies and promising some kind of return in the future. Now, Trump’s team has publicly launched $TRUMP, but they’ve also said on the $TRUMP website that it’s not a security and haven’t promised any future profits. So, it’s hard to call $TRUMP a security. But the SEC hasn’t made its stance on meme coins clear yet. If $TRUMP starts acting like a security, it could still face SEC investigation and regulation.

Then there’s the tax issue. According to the IRS, profits from investing in cryptocurrencies are taxable. Trump’s team holds 80% of $TRUMP, which will be unlocked in batches over the next three years. This creates some tax challenges. First, whether unlocking $TRUMP counts as a taxable event is worth noting. U.S. tax law says capital gains tax is only triggered when assets are sold or traded. So, unlocking cryptocurrencies usually isn’t taxable unless they’re sold or used in a transaction. Once $TRUMP is traded or converted into other assets, capital gains will need to be calculated based on the market price at the time of the transaction and taxes will be due. Another tricky part is figuring out the cost basis of $TRUMP. In U.S. tax law, capital gains tax is calculated based on the price you bought the asset for. But with $TRUMP’s wild price swings, figuring out its cost basis can be really complicated. If Trump’s team decides to sell these cryptocurrencies in batches, the timing and market price of each sale will affect the capital gains calculation. Without keeping detailed records of each transaction, tax filing could become a real headache.

Also, launching meme coins could lead to controversies about political donations. In the U.S., the FEC has strict rules about transparency and limits on political donations. If $TRUMP is used to raise political funds, it could easily bypass the current regulations and break the law. Right now, there’s no solid evidence that any companies or people are buying $TRUMP as a way to make political donations. But this kind of behavior from a politician—launching a meme coin and making a lot of money—could seriously disrupt the existing political donation system in the U.S. and even raise suspicions of corruption. It’s worth noting that Trump chose to launch the coin before officially taking office, maybe to avoid accusations of using public power for personal gain. But even so, this move could still have many negative impacts. If the price of $TRUMP drops a lot, Trump’s political reputation could take a big hit.

Summary

Trump’s launch of $TRUMP is definitely a bold experiment with both political and market impacts, and it fits his political image. From a market perspective, $TRUMP has successfully sparked a lot of investment enthusiasm and drawn tons of attention to meme coins in a short time. But when it comes to FOMO(fear of missing out)and FUD(fear, uncertainty, and doubt),people should stay rational. It’s important to think about both the economic risks of investing and the legal and compliance risks. After all, the key to “going all-in on memes” is to stay in the game.