5 things to know about Trump's meme-coin frenzy

• Donald Trump's meme coin soared spectacularly over the weekend before a sharp sell-off.
• The $TRUMP token made the President into a crypto billionaire overnight.
• Here's what to know about the high-profile meme-coin launch.

Days before his inauguration, Donald Trump announced the release of an official $TRUMP cryptocurrency as a way to celebrate his return to the White House.

Though the coin's website specifies that it is only an "expression of support," traders wasted no time piling in. Eager crypto investors were also introduced to a $MELANIA meme coin on Sunday, named after the first lady.

What unfolded has been a frenzy around the two meme coins, producing spectacular gains for some while leaving others skeptical. Here are five things to know about the Trump family's crypto bonanza.

1. The price has been on a roller coaster

Crypto has a reputation for wild price swings, and the President and the first lady's meme coins have showcased that spectacularly.

$TRUMP soared to $75.35 on Sunday, marking a whopping 1,010% gain from its price on Friday, but the token plunged dramatically when the $MELANIA coin was unveiled Sunday.

The first lady's token fared similarly not long after issuance. At a peak price of $13, the token became the top-trending crypto on CoinMarketCap by early Monday, outdoing heavy hitters such as bitcoin, ether, and XRP. But it didn't last long, and the token has unraveled sharply in the past 24 hours.

Profit-taking and investor disappointment are the chief culprits behind the meltdown. Though hope was high that Trump would signal support for crypto on his first day in office, the president has remained mute on the issue, and didn't address bitcoin or the wider space during his inauguration day speeches. Notably absent was any update on the hotly anticipated bitcoin reserve that Trump teased before being sworn in.

According to CoinGecko, $TRUMP and $MELANIA have a market cap of $7,598,988,479 and $607,484,542 on Tuesday afternoon, respectively.

2. Some investors aren't thrilled

While Trump's announcement called on supporters to "have fun" with the token, some have soured on the project.

That holds true even among crypto enthusiasts, who have criticized the launch as a setback for an industry trying hard to be taken seriously. For many crypto enthusiasts, renewed attention on meme coins serves only to tarnish the industry's credibility, reviving a volatile 2021 meme coin trend that burned many investors.

"Trump coin is embarrassing. It is the opposite of what you voted for," said Peter McCormack, a crypto podcaster with 550,000 followers on X.

Enthusiasm and a flood of donations from the crypto industry helped propel Trump back into the White House, with hopes of looser regulation and wider support for the market under his watch. Many in the industry are waiting for him to make crypto a national priority and could be disappointed if changes don't come soon.

3. The biggest $TRUMP holders saw huge returns

Despite the coin's so-far brief existence, some are already much richer after investing.

Investors garnered returns of over 10,000%, though positions varied wildly. A $2.4 million position was among the highest holdings, according to Monday data from analytics firm Nansen. But the highest gain went to a $270,000 position, which garnered a 19,000% return.

By noon on Monday, around 33% of the 15 largest holders had completely exited their positions.

Nansen data shows that one investor exited at a $3.5 million loss after their position was down by 36%.

4. Donald Trump is a crypto billionaire — on paper

On paper, the coin has added tens of billions to Trump's net worth.

CIC Digital, the issuer of the TRUMP coin and an affiliate of the Trump Organization, controls 80% of the token's supply. That amount was worth about $30 billion as of Tuesday afternoon.

It isn't the first time Trump and his family have dabbled in the crypto space, either.

Before $TRUMP, the first family endorsed World Liberty Financial, a defi project that offers its own token. According to data from Arkham, it has raised over $300 million in total sales since it was launched in September, 75% of which is allocated to the Trump family.

Trump also launched a series of NFTs over the years, most recently while on the campaign trail last May.

5. Trump might have a hard time cashing out

However, while Trump's meme coin has soared, he might have a hard time converting those paper gains into cash. That's because any sale by Trump could flood the market with supply of TRUMP coin, overwhelming demand and crashing the price.

While $TRUMP has made the president rich on paper, only a small portion of the meme coin is traded. According to the website, 10% is for public issuance and another 10% is for "liquidity."

For the portion that is accessible, Trump would need to find someone willing to trade with him. If investors saw that the president was selling off his own asset or about to unleash a massive wave of supply, the price would likely crash, harming his paper gains in the process.

The same concern plagued shares of Trump Media and Technology Corp., a meme stock that surged during the presidential campaign as part of the wider Trump trade. Though Trump has millions staked in the equity, investors speculated whether he would sell his holdings — causing pain for those who held the stock.