**Who Profits and Who Loses from Trump Memecoins?**
The year 2025 has just begun, and we have already witnessed a series of “memecoin chaos.”
First, the return of Donald Trump to the White House kicked things off. On the eve of his inauguration, he launched the official memecoin $TRUMP, which saw a trading volume exceeding $10 billion within 24 hours. According to CoinMarketcap data, the price peaked at $75 before plummeting, and by late February, it hovered around $15. This means that those who bought at the peak faced losses of over 80%.
It’s not just Trump; his wife, Melania Trump, the First Lady of the United States, followed suit a few days later by issuing her personal memecoin $MELANIA. According to CoinMarketcap data, the price surged to about $13 before dropping to less than $1 in February, with fluctuations reaching as high as 92%.
The chaos of political memecoins isn’t over yet. In early February, the new Argentine President Javier Milei posted on social media platform X, endorsing a memecoin called “LIBRA,” claiming it could boost the economy. Many retail traders, after seeing this post, rushed to buy, causing the price of $LIBRA to rise from $0 to nearly $5. However, just a few hours later, the price plummeted below $1, prompting Milei to delete the post and distance himself from it.
These three “celebrity coins” that sparked excitement in early 2025 share a common trait: they experienced rapid surges and drops in a very short time. While some did indeed profit, many others exchanged their high hopes for shattered dreams.
In response to the frenzy surrounding political memecoins, Ethereum founder Vitalik Buterin expressed on his personal X account that “political coins” are akin to candy; their sweetness may provide momentary enjoyment, but they offer no substantial nutrition and do not aid in wealth accumulation. Moreover, they could potentially become a form of bribery.
In the market, there are always two roles: “investors” and “traders,” which can further be divided into “professionals” and “amateurs,” or “whales” and “retailers.” Memecoins, which lack genuine value support, have prices that fluctuate based on community discussions. However, high-volatility assets often attract many traders seeking opportunities. In such a fiercely competitive market, how can one avoid becoming the victim of predatory practices?
The timing of buying and selling, as well as decisions regarding whether to add to positions or cut losses, is the result of many intertwined factors, encapsulated in the term “trading behavior.”
In a podcast titled “Web3 Great Westward Expansion,” co-produced by WEB3+ under Digital Age and XREX, I discussed the differences in trading behavior between “professional traders” and “retail traders” with trading researcher Ray. Ray, who has experience in traditional financial markets with hedge funds, highlighted several “mysterious trading behaviors” that one should be cautious of, including “too late to cut losses,” “too early to take profits,” and “addiction to the thrill of making quick money.”
Given that many friends around me are interested in cryptocurrency trading, along with my experience running XREX exchange, I want to share four insights from the perspective of a “retail trader.”
**Suggestion 1: Most Virtual Assets Lack Technical Analysis Value! Humanity and Discipline Are Key**
Cryptocurrencies have only been around for about 16 years, and their development is still in an early stage. According to a report by Crypto.com, there are currently approximately 30 million to 60 million active cryptocurrency users worldwide, accounting for only 5% to 10% of the total number of holders.
Moreover, 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 human factors and uncertainties. Price fluctuations are often linked to community sentiments and short-term discussions, unlike publicly traded companies that regularly release financial reports and hold shareholder meetings to disclose information for investor judgment.
In other words, most virtual assets currently lack analytical value. While one might get lucky and make money, more often than not, the invested capital could vanish without a trace. For example, the celebrity memecoins mentioned at the beginning of this article saw price movements that were not related to the actual value of the assets but were influenced by community sentiment and human psychology. Such assets are easily manipulated.
At this moment, recognizing the impact of “human nature” and “sticking to discipline” is a more valuable reference point for retail traders.
**Suggestion 2: Trusting Signal Providers Is Not Foolproof? Staying Rational Is More Important Than Anything**
Many new retail traders who are not yet familiar with the market often choose to engage in “copy trading,” which means replicating the trades of a specific trader or institution in hopes of achieving similar success.
As mentioned in the first suggestion, in a market where there is still little technical analysis available, following signals or copy trading is not a reasonable approach. Each person’s background and circumstances differ, and without technical analysis to support it, replicating the same success is often challenging. In the market, it is difficult for anyone to be infallible; it is unlikely for anyone to succeed every single time. The few who manage to survive and remain active amid market turbulence are often humble and low-key, rarely publicizing their successes or trades.
Newcomers to the market must start by learning and accumulating experience rather than seeking shortcuts. Copying trades and showcasing results both carry risks and can disrupt one’s established investment discipline. Remember, “staying rational” is always the highest principle.
**Suggestion 3: Be Careful Not to Get Addicted! Maintaining Mental and Physical Well-being Is Crucial for Making Correct Investment Judgments**
For retail traders, nothing is more important than being “mentally and physically healthy.” Only with good health can one make sound judgments and enjoy the fruits of their investments.
I have seen too many people invest with a gambling mindset, leading them to become overly fixated on their assets. They stay up all night, obsessively monitoring price changes, and constantly check their phones during meals, work, or while commuting. This lifestyle can lead to mental exhaustion over time.
In a poor mental state, even professional traders find it difficult to make rational and correct decisions, let alone retail traders. Trading requires a high level of focus and attention. Based on my years of observation, when a person cannot maintain mental and physical well-being, disaster is not far behind.
**Suggestion 4: Trade According to Your Personality**
Finally, whether you are a professional trader or a retail trader, it is essential to trade in a way that aligns with your personality to ensure longevity in the market.
Regardless of your role, “human nature,” “rationality,” “mental and physical health,” and “self-awareness” are always the four most crucial keywords in trading.