Who Profits and Who Loses from Trump Memecoins?
The year 2025 has only just begun, yet we have already witnessed a series of “memecoin chaos.”
First, the second-time White House occupant Donald Trump made headlines by launching the official memecoin $TRUMP on the eve of his inauguration. The trading volume exceeded $10 billion within 24 hours. According to CoinMarketCap data, the price peaked at $75 and then plummeted, dropping to around $15 by late February. This means that anyone who bought at the highest point would have incurred a loss of over 80%.
Not only Trump, but his wife, Melania Trump, the First Lady of the United States, followed suit a few days later by issuing her personal memecoin $MELANIA. Based on CoinMarketCap data, the price surged to approximately $13 before falling to below $1 by February, with fluctuations reaching as high as 92%.
The chaos of political memecoins did not stop there. Newly elected Argentine President Javier Milei posted on social media platform X in early February, endorsing a memecoin called “LIBRA,” claiming it could boost the economy. After seeing this post, numerous retail traders rushed to buy, causing the price of $LIBRA to skyrocket from $0 to nearly $5. However, just a few hours later, the price plummeted below $1, after which Milei deleted the post and distanced himself from it.
These three “celebrity coins” that generated a buzz at the beginning of 2025 share a common trait: they experienced rapid rises and falls in a very short time. Some individuals did make money, but many more exchanged their abundant hopes for a shattered reality.
In response to the rampant phenomenon of political memecoins, Ethereum founder Vitalik Buterin expressed on his personal X account that “political coins” are like candy; their sweetness may provide temporary pleasure but lack substantial nutrition, offering no help in wealth accumulation. Additionally, they may potentially serve as a tool for bribery.
In the market, there have always been two roles: “investors” and “traders,” which can further be divided into “professional” and “amateur,” or “institutional” and “retail.”
Assets like memecoins have no actual value support; their price movements are linked to community discussions, making them highly volatile. This volatility can present opportunities for many “traders.” However, in such a fierce market, how can one avoid being the “chopped leek”?
The timing that drives people to buy or sell, as well as whether to increase their positions or cut losses, results from the interplay of many factors, which constitutes what is known as “trading behavior.”
In the “Web3 Great Westward Expansion” podcast, co-produced by WEB3+ and XREX, I discussed the trading behaviors of “professional traders” and “retail traders” with trading researcher Ray in the episode titled “Hey! Why Are You Trading Like That? What Is the Difference Between Professional Traders and Retail Traders? Breaking Free from Trading Myths to Avoid Pitfalls.”
Ray, who has experience in traditional financial markets and hedge funds, shared several “mysterious trading behaviors” to avoid from a “professional trader” perspective, including “delaying stop-loss,” “taking profits too early,” and “becoming addicted to the thrill of big gains.”
Since many of my friends are interested in cryptocurrency trading, combined with my experience running the XREX exchange, I offered four key insights from the “retail trader” perspective.
Recommendation 1: Most Virtual Assets Lack Technical Analysis Value! Human Nature and Discipline Are Key
Since the inception of cryptocurrency, only 16 years have passed, and its development is still in a very early stage. According to a report from Crypto.com, there are currently around 30 to 60 million active cryptocurrency users globally, accounting for only 5% to 10% of all cryptocurrency holders.
Additionally, the global cryptocurrency industry has only recently entered a regulatory phase over the past two years. Many projects have extremely opaque internal information, mixed with significant human factors and uncertainties. Price fluctuations are often related to community sentiment and short-term topics, unlike publicly listed companies that regularly release financial reports and hold shareholder meetings to disclose information for investors to make judgments.
In other words, most virtual assets currently do not possess analytical value. With a stroke of luck, one might make money, but more often than not, the invested capital is lost without returns.
For example, the celebrity memecoins mentioned at the beginning of this article have price movements that are not related to the actual value of the assets but are influenced by community sentiment and human nature, making these types of assets easily manipulable.
At this moment, paying attention to the influence of “human nature” and “adhering to discipline” is a more valuable reference for retail traders.
Recommendation 2: Relying on Others to Trade for You Is a Mistake? Staying Rational Is More Important Than Anything
Many newcomers to the market, unfamiliar with it, often choose to engage in “copy trading” when they first encounter cryptocurrency assets, meaning they replicate the trading actions of a particular trader or institution in hopes of achieving the same success.
As mentioned in the first recommendation, in a market where there is still not much technical analysis to be done, copy trading is not a rational choice. Each person’s unique background means that, without technical analysis to support it, achieving the same success is often difficult. In the market, it is rare for anyone to be infallible, and only a few can withstand the challenges and remain active on the trading floor. These exceptional professional traders are often low-key and humble, rarely showcasing their trades publicly.
Newcomers to the market should focus on acquiring knowledge and accumulating experience rather than seeking shortcuts. Copy trading and showcasing trades both carry risks that could disrupt one’s established investment discipline; remember that “staying rational” is always the highest principle.
Recommendation 3: Be Careful Not to Become Addicted! Maintaining Mental and Physical Well-being Is Essential for Making Correct Investment Judgments
For retail traders, nothing is more important than “maintaining mental and physical well-being.” Only with good health can one make sound judgments and enjoy the fruits of investment.
I have seen too many people approach investing with a “gambling” mindset, leading to an excessive focus on their invested assets. They may stay up late at night, constantly monitoring price changes, and remain glued to their phones during meals, work, or commuting to check on asset fluctuations. This lifestyle, over time, can lead to mental exhaustion.
In a poor mental state, even professional traders struggle to make rational and correct decisions, let alone retail traders. Trading requires a high level of focus and attention. From my years of observation, when an individual cannot maintain mental and physical well-being and balance, disaster is often just around the corner.
Recommendation 4: Trade According to Your Personality
Finally, whether you are a professional trader or a retail trader, you must trade according to your personality to ensure long-term success.
In the trading process, “human nature,” “rationality,” “mental and physical health,” and “self-awareness” are always the four most important keywords for both professional and retail traders.