Trump’s volatile new Memecoin is sucking up inflows, draining the broader cryptocurrency market

(Bloomberg) — President-elect Donald Trump’s debut digital currency has rocked the cryptocurrency market, drawing billions of dollars in trading volume while raising concerns about conflicts of interest.

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Trading under the “Trump” token on the Solana blockchain, the coin’s market cap rose to $15 billion over the weekend, according to data from CoinMarketCap, after the Republican promoted it on his social media accounts on Friday.

The digital asset’s market value then fell below $10 billion on Sunday in New York after Trump’s wife, Melania, also unveiled a coin, attracting traders seeking to profit from the fast-changing speculative demand for memes.

Meanwhile, the broader cryptocurrency market faced difficulties over the weekend, including a decline in the largest token, Bitcoin (Bitcoin-dollar), and a significant decline for the second-ranked ether (Ethereum-dollar). Sol (sol-dollar), the crypto asset tied to the Solana digital ledger that hosts Trump’s meme coins, bucked the trend and rose.

Richard Galvin, co-founder of hedge fund DACM, said the “volume of capital flowing” into the Trump token left most other tokens trading “poorly” outside of SOL and some related assets.

The president-elect’s website describes it as “Trump’s only official meme.” The project’s art features an illustration of the incoming US president raising his fist in the air, a reference to his reaction following an attempt on his life during a campaign rally last year.

The small print on the site notes that the president-elect’s token is not intended to be “an investment opportunity, investment contract, or security of any kind.” However, crypto-minded Trump fans started buying immediately. Major exchanges like Coinbase Global Inc. said… and Binance Holdings Ltd. Over the weekend it intends to list the token on its platforms.

The Melania Project website also says the token is not meant to be an investment opportunity or security, adding that “Melania memes are digital collectibles intended to serve as an expression of support and engagement with the values ​​embodied by the Melania Token.”

Trump made clear overtures to the cryptocurrency industry in the months before and after his election. Bloomberg News previously reported that he is considering issuing an executive order designating the asset class as a “national priority.”

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