Trump Launches Personal Crypto Asset: Memes Market Sparks New Wave

On January 18, Donald Trump announced the launch of his exclusive crypto asset memes $TRUMP through social media. This news quickly sparked market discussions, with the market capitalization of $TRUMP surpassing $24 billion on the first day of issuance, becoming the focus of the market. From ordinary investors to seasoned traders, most people have shown great interest in this meme coin heavily characterized by Trump’s personal touch.

Memes are a type of Crypto Assets designed based on internet culture, characterized by high entertainment value and viral spread. Memes typically draw on popular figures or events to attract investor attention, emphasizing market sentiment rather than actual economic function. From the early Dogecoin to the recent $Pepe, the rise of these memes has always been fueled by public speculative enthusiasm. This time, Trump's issuance of $TRUMP, leveraging his strong personal brand effect and unique combination with political factors, has once again elevated the heat of the entire memes market.

Trump Personally Enters: Releases Positive Signals for Crypto Assets Market

According to Trump's team's statement, the issuance of $TRUMP is intended to "celebrate a leader who does not back down in adversity." This meme not only centers around Trump's political image but also incorporates the narrative of his assassination attempt during the 2024 campaign, further igniting emotional resonance in the market. Coupled with Trump's commitment to supporting the Crypto Assets market, investors are full of expectations for the future of $TRUMP.

Meme coins related to celebrities are not uncommon, and a well-known crypto asset has even entered the top ten by market capitalization in this bull market due to its close ties with a certain tech entrepreneur. The most special aspect of $TRUMP is that it is a meme coin directly issued by Trump in his capacity as the president-elect, marking a groundbreaking initiative in both the crypto asset market and the political arena. From multiple promises to implement a series of favorable policies for crypto assets during his term, to investing in various mainstream crypto assets, and even issuing related NFTs and VC coins, Trump and his family have deepened their involvement in the crypto market.

The issuance of $TRUMP this time means that Trump has chosen to ride the wave of memes in the most down-to-earth way possible by personally entering the game as the incoming president. As the first president to issue a meme coin, Trump has injected his political influence directly into the meme coin market with this unconventional behavior, not only demonstrating his strong recognition of Crypto Assets but also helping them further "break out" and attract more attention and funds, releasing positive signals for the crypto market in terms of policy outlook and liquidity.

From On-chain Carnival to Rational Reflection

However, behind this meme frenzy lies not only the wealth effect and political signals but also complex compliance risks. As Crypto Assets are increasingly receiving attention from governments around the world, Trump's actions undoubtedly bring Crypto Assets directly into the spotlight for scrutiny.

In terms of securities regulatory risks, a key question is: does the meme belong to securities? This is an important factor affecting its legality. In the United States, Crypto Assets issued through ICOs are considered securities and are subject to strict regulation by the SEC. The SEC typically uses the Howey Test to determine whether an asset constitutes a security. This test includes four elements: investment of money, expectation of profits, common enterprise, and efforts solely from others. The core feature of ICOs is to publicly raise funds by issuing Crypto Assets and promising some form of future return.

From the current situation, although Trump's team has publicly issued $TRUMP and received purchases from investors, it has already stated on the $TRUMP official website that this Crypto Asset does not belong to securities and has not promised any future profit potential. Therefore, it is difficult to classify $TRUMP as a security. However, the SEC's attitude towards memes is still unclear. If the actual performance of $TRUMP exhibits characteristics of securities, it may still be subject to investigation and regulation by the SEC.

Secondly, there are tax compliance issues. According to the regulations of the IRS, capital gains from investing in crypto assets are considered taxable income. The 80% $TRUMP held by the Trump team will be unlocked in batches over the next three years, which poses significant challenges for their tax compliance. Firstly, the question of whether the unlocking of $TRUMP constitutes a taxable event is worth noting. U.S. tax law states that capital gains tax obligations are triggered only when an asset is disposed of. Therefore, the unlocking of crypto assets itself is generally not considered a taxable event unless the crypto assets are sold or used in a transaction.

Once Crypto Assets are traded on the market or converted into other assets, capital gains must be calculated based on the market price at the time of the transaction, and taxes must be paid. Determining the cost basis after $TRUMP is unlocked is another tricky issue. Under U.S. tax law, capital gains tax is calculated based on the cost basis of the asset, which is the price at the time of purchase. However, due to the extreme price volatility of $TRUMP, determining the cost basis of the Crypto Assets can be very complex. Especially if the Trump team chooses to sell these Crypto Assets in batches, the timing of each transaction and the market price will affect the calculation of capital gains. If the details of each transaction are not properly recorded, this will cause significant trouble for tax reporting.

In addition, the issuance of memes may also trigger controversies regarding political donations. In the United States, the Federal Election Commission has strict transparency requirements and limits on political contributions. If $TRUMP is used as a tool for raising political funds, it is highly likely to circumvent the existing regulatory framework and cross legal boundaries. Currently, although there is no conclusive evidence that any company or individual has purchased $TRUMP as a form of political donation, the behavior of politicians issuing memes and making substantial profits may still severely impact the existing political donation order in the United States, and Trump may also be suspected of implicit corruption.

It is worth noting that Trump chose to issue coins before officially taking office, perhaps to avoid external accusations of using his public power for personal gain or monetizing his authority. However, even so, this issuance of coins may bring numerous negative effects, especially if the coin price drops significantly, Trump's political credibility may suffer a serious blow.

Summary

Trump's launch of $TRUMP is undoubtedly a bold experiment that combines political significance and market influence, but it precisely aligns with the political image he has crafted for himself. From a market performance perspective, $TRUMP has successfully ignited investment enthusiasm in a short period, attracting countless attention to memes and possessing unprecedented influence. However, while market sentiment is high, investors should remain rational, paying attention to both the economic risks of their investment actions and the legal and compliance risks. After all, in the world of investment, maintaining a clear mind and a long-term perspective is the key to success.