Every so often, the cryptocurrency industry experiences something known as a black swan event, which is essentially a moment that deeply impacts the industry but is almost impossible to predict without first-hand, inside knowledge. The separate FTX and Luna collapses are two examples of negative black swan events, but the term isn’t always negative, such as El Salvador adopting bitcoin as legal tender in 2021, which encouraged other countries to consider crypto-friendly policies. Black swan events usually stand in contrast to unicorn events, which is when projects quickly reach a valuation of over $1 billion out of seemingly nowhere and are largely seen as positive — although unexpected — occurrences.
That all changed on January 17, 2025, when Donald J Trump released his own memecoin $TRUMP and essentially combined the two, creating a … black unicorn?
Trump‘s Crypto Black Swan Event
Love or hate Trump — and he is indeed Marmite personified — there is simply no denying that he knows how to command attention. As such, the whole world waited with bated breath for January 20th — inauguration day — which would see him retake the White House for his second term. This was particularly interesting to cryptocurrency enthusiasts, who were excited to see the benefits of his self-proclaimed pro-crypto stance play out.
However, the future president had a prepared ace already housed up his sleeve, which he played three days beforehand: launching his very own meme coin (and some might say overt grift) $TRUMP to an utterly unprepared and confused general public. Not to mention that most of the major crypto players were gathered at a black-tie event Trump hosted when it launched, meaning most of them may’ve not known and couldn’t buy — perhaps going down as the biggest crypto-related trolling flex of all time.
To say the launch was successful is an understatement, with the token reaching a jaw-dropping ATH MC of $27 billion in less than a day, and crowning more than a few millionaires along its supersonic path. (For comparison, it took Dogecoin seven years and five months to hit that same MC). However, there is a darker side to this unexpected event.
The Impact
The fallout of $TRUMP was felt throughout the entire crypto space, from macro to micro. Firstly, Solana — the network of choice for Trump’s token — saw its own native token, SOL, experience a huge surge in volatility. In addition, the entire Solana network faced massive congestion issues due to heightened activity. This, in turn, stressed the servers of numerous popular custodial wallets, such as Phantom, with many users waiting for hours to have transactions go through or appear in their wallets. Many more were unable to buy or sell other tokens, leading to financial losses.
Beyond this, literally thousands of projects — many of which were based on Solana — saw their own project values crash as investors dumped their holdings to ride the $TRUMP token wave. Many of these projects hit low enough price points for irrecoverability, and projects that launched the same day? Nuked.
This black swan event was compounded the very next day in a baffling, almost Twilight Zone-esque follow-up event. President Trump’s wife, Melania, released her own coin, $MELANIA. Shock quickly turned to anger as the market continued to dump, and investors flocked to buy the new token. This negative price action even affected Trump’s crypto token, which dropped 40% and brought with it bitter jokes about how “the wife always takes half.” Some major crypto players expressed their vitriol on X, such as Alex Becker who stated: “Okay I’m not doing this obnoxious sh*t. I’ll just say it. This is embarrassing for the United States and making me regret my vote.“
The Takeaway
The disturbance in the force, caused by the cringe event of President Trump and his wife launching meme coins, is slowly rectifying itself, but not before the industry saw a slew of copycat pump-and-dump tokens, such as the ironically unofficial Baron Official Meme token, which hit an impressive $336 million MC before crashing like a lead airplane.
However, beyond the fact that it might be inadvisable for the acting president of a country to release his own meme token, this double-black swan event showcased a far more important lesson: These coins have tremendous volatility, as well as upside potential, and are often tied to significant cultural and macroeconomic moments, which are nonetheless transient and can implode at any moment. Simultaneously, these types of events make a mockery of the industry as a whole and everyone in it for legitimate reasons. Plus, of course, they invite naysayers to double down on how ridiculous they feel the whole space is.
The good news is that both coins seem to be slowly failing. Crypto cream always seems to rise to the top, and solid projects are finally seeing investors return, meaning the larger industry lives on to fight another day.
That is until Baron releases his real coin.
1 Comment
Comments are closed.