Donald Trump’s memecoin drew renewed attention last week after a scheduled token unlock allowed early investors and insiders to begin trading previously restricted tokens. The coin, which first launched ahead of Trump’s second inauguration, has seen increased activity following the release. At launch, 200 million Trump memecoins were made available, and last week, an additional 40 million coins were unlocked, bringing the total amount in circulation to around 1 billion within three years, Bloomberg reported.
The memecoin initially surged to a market value of $14 billion in January, but soon after, its price dropped by around 90 per cent as holders rushed to cash out. This volatility raised concerns about conflicts of interest, and market observers are now closely watching what will happen as more tokens are released into circulation.
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According to Bloomberg, the Trump Organization’s affiliate, CIC Digital LLC, and Fight Fight Fight LLC, collectively hold 80 per cent of the unlocked coins. TRUMP, the memecoin tied to former U.S. President Donald Trump, saw a sharp rise of over 9 per cent on Friday, just a day after tokens worth $320 million were unlocked. Over the past week, it’s up around 8.4 per cent, trading at about $8.37. That’s still a steep drop from its peak of over $71 in mid-January, according to CoinMarketCap.
Bloomberg quoted Dylan Bane, an analyst at Messari, as saying that token unlocks can sometimes lead to significant price drops. While he said that teams don’t usually sell off tokens all at once. They’re more likely to do it gradually. Still, no one really knows what they’re planning to do.
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According to Bloomberg, Edward Chin, co-founder of Parataxis, echoed a similar sentiment, noting that if proper market makers are involved, the short-term impact of the token unlock could be limited. However, he cautioned that over time, the increased supply might weigh on prices or cap potential gains, even if fresh demand comes in.
Trump and his family have become increasingly involved in the crypto space, with various ventures, including NFTs, a decentralized finance project, and two memecoins. According to Bloomberg, these efforts are nearing $1 billion in paper gains.
