Gensler was right? Trump’s memecoin era fuels market debate

Over the weekend, the United States President-elect Donald Trump and his wife, Melania, launched memecoins just ahead of the much-anticipated inauguration event. The events have sent the crypto community into a tailspin.

Trump’s memecoin launched on Friday evening and skyrocketed to a $14 billion market cap and a top-20 spot. Just days after Trump’s launch, Melania released her own rival memecoin. MELANIA surged past $5 with a fully diluted market cap of over $5 billion.

The ensuing chaos in the digital assets industry led analysts to recall the recently departed US SEC chair, Gary Gensler’s warnings regarding the market.

Trump’s memecoin drama

Commenting on the situation, Eleanor Terrett, a Fox Business reporter stated that social media was full of “Gensler was right” posts as the Trump family’s tokens collided. She added that such reactions have put the finishing touch on the farcicality of this entire weekend in crypto.

Db, a pseudonymous operator of a crypto news monitoring service, posted that “Gensler is laughing at us.” Another influence, Naiive, attached a smiling John Cena meme suggesting that Gary Gensler would be watching Donald Trump launching a memecoin just hours after he left the SEC.

Cryptoquant CEO, Ki Young Ju also highlighted Gensler’s stance and suggested that Trump has opened the era of memecoins. He added that retail investors always chase memecoins like $TRUMP because of social media and community influence.

"I told you so" pic.twitter.com/hwfyHn1GHD

— Ki Young Ju (@ki_young_ju) January 19, 2025

He mentioned that such assets offer speculative gains, but their value relies on community engagement and the actions of influencers. Ju added as crypto remains decentralized, meme-driven investments are likely to evolve, which can raise both potential and risks.

Nate Geraci, President at ETF Store, in a post, asserted that memecoin traders are fully conscious that they’re playing the crypto version of musical chairs. These traders are not under illusions that they’re investing in Fortune 500 companies, he added. He also urged memecoin investors not to view these tokens as legit “crypto projects.”

The Kobeissi Letter posted on X, “Less than 48 hours ago, Donald Trump launched $TRUMP, which erased $7.5 billion in market cap in 10 minutes. With Melania’s token launch, the market saw massive sell orders in $TRUMP immediately after.”

Balaji Srinivasan, former CTO of Coinbase, found the launch of MELANIA memecoin right after the launch of the TRUMP token “incredible”. He suggested that this move signals zero scarcity and instantly crashes the value of TRUMP.

Crypto-friendly rules on the way?

Former SEC Chair Gary Gensler publicly antagonized the crypto market and believed that old laws were enough to regulate them. He always pointed out the massive risk involved in the digital assets market while leading the charge with enforcement against crypto firms. He has been a big fan of the Howey Test which confirms whether an asset is a “security” or not, based on multiple prongs. 

A similar situation occurred just a day after Gensler left the office. It has been revealed that Donald Trump retains 80% of the $TRUMP supply between himself and his team. On the other hand, Melania Trump’s memecoin launched with an even larger 88% portion allocated to her and her team.

MELANIA’s website shows an even faster vesting schedule. It claims that 45% of the supply is allocated to community distribution and liquidity provision but data shows that 89% of MELANIA remains locked in a single wallet.

Such propositions have raised eyebrows among digital assets investors. However, Donald Trump has already announced himself as the “Crypto President” and the market expects him to fulfill the promises he made during the rallies.

A Bitcoin strategic reserve and crypto-friendly rules are the top priorities for investors. Tom Trowbridge, CEO at Fluence Labs, seeks that the incoming administration ushers a new world for the crypto ecosystem. He pointed out that Bitcoin ETFs were only approved after the SEC lost the legal battle. He believes that the appointment of David Sacks as the “crypto czar” clearly signals a pro-crypto stance.

Bitcoin price is riding up on the bullish waves, hitting fresh highs again. BTC has managed to surge by more than 60% in the last 90 days and went on to mark a new high of over $109k mark on January 20, 2025. Trowbridge mentioned that the crypto reserve has the potential to set off a race among other countries to accumulate Bitcoin and other assets. 

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