The Breakdown - The Trump Crypto Era Begins with a Surprise Memecoin

Episode Date: January 22, 2025

No day 1 executive orders on crypto, but we did get one of the craziest and most massive memecoin launches ever, courtesy of an official Trump memecoin promoted by the then-President Elect. The launch has Crypto Twitter feeling all sorts of ways. Sponsored by: Ledn Need liquidity without selling your Bitcoin? For 6+ years, Ledn has been the trusted choice for Bitcoin-backed lending. With transparency, security, and trust at our core, we help you access your BTC’s wealth while HODLing. Discover what your Bitcoin can do at ledn.io/borrowing. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/nathanielwhittemorecrypto Subscribe to the newsletter: https://breakdown.beehiiv.com/ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the Big Picture Power Shifts remaking our world. What's going on, guys? It is Tuesday, January 21st, and today we are catching up on the very beginning of the Trump presidency era of crypto. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes are going to bit.ly slash breakdown pod. All right, friends, well, the Trump era of the crypto industry has officially begun.

Yesterday, Donald Trump was sworn into office as the 47th president of the United States. In his inaugural address, Trump touched on many topics from free speech to a promise of a forthcoming golden age for America, to the need to reclaim the Panama Canal, and yet discussion of Bitcoin and crypto was completely absent. Many on crypto Twitter were aghast at this, and some reminded people that they probably shouldn't be surprised that the new president had more important things on his mind than shouting out their tokens. Wormhole Labs developer Arthur wrote,

Y'all beg in Trump to mention crypto like a little kid begging his mom for candy while she's trying to get through a shopping list of actual food. BitPain wrote, You realize this was the acceptance speech for the presidency of the United States, not a Bitcoin conference follow-up address, right? After the speech, tension shifted to the massive pile of executive orders next to an on-stage desk. Trump signed roughly 50 executive orders yesterday and revoked dozens that were signed by President

Biden. Alas, not a single one had anything to do with crypto. No Bitcoin strategic reserve, no repeal of SAB 121. This came as a great surprise to crypto Twitter, which seemed to expect the entire regulatory regime to be addressed in a day one executive order. There were many big picture resolutions signed, such as leaving the World Health Organization and a host of immigration reforms. However, they largely spoke to red meat, culture war type issues and seemed designed to grab headlines and make a spectacle. Alas, for folks outside of the listeners to this podcast, for example, reforming crypto banking regulation just doesn't have the same profile. Ferrell commented,

Did you really think Trump was going to sign executive orders regarding crypto in an arena full of people that don't care about crypto? The night then turned to presidential pardons, with many hoping that Silk Road founder Ross Ulbricht would be in that stack of papers. Trump did pardon about 1,500 people, including almost everyone involved in the January 6th riots, but Ross was not named. And that was it. The entire inauguration day passed without a single mention a Bitcoin or a single crypto policy, i.e. Zero campaign promises fulfilled in the opening hours of the presidency. Bitcoin, which hit a new all-time high going into the event, dumped all the way down to $100,000. Julian Farr of Apollo Sats suggested we should recalibrate our expectations

at just a touch, tweeting, friendly reminder that presidential terms are four years long. Don't panic if your cause wasn't name-dropped in the first 30 minutes. What's more, as crypto-tweater took a deep breath, they were reminded that things were just getting started for the Trump administration. Trump was originally supposed to sign over 100 executive orders last night, with the remainder piled on the resolute desk for the signing to continue today. David Bailey, the CEO of Bitcoin Magazine, commented, got confirmation tonight that our Eos are among the first 200. I have no idea what made it in, but good news cometh. The promise to free Ross also hasn't been forgotten. As the evening came to a close, Elon Musk tweeted, Ross will be freed too, although I will

say that wasn't the action or statement of Elon's that got the most attention yesterday. All in all, a very crypto-Twitter reaction to a fairly meaningless evening for the industry, but after what had happened a couple days earlier, there was still plenty of news to digest. Indeed, the inauguration has been completely overshadowed by what some are calling the craziest weekend in crypto history. On Friday night, a meme coin bearing the ticker Trump was launched on Solana. Crypto Twitter was initially unsure what to make of it as we've seen dozens of Trump meme coins in the past, with few having any link to the first family. The president, however, soon confirmed his endorsement tweeting,

my new official Trump meme is here. It's time to celebrate everything we stand for, winning, have fun. Things escalated quickly from there. By midnight after three hours of trading, the meme coin hit $9 billion fully diluted value. It peaked out at $75 billion early on Sunday morning. Many veterans of the industry were in awe of the launch. Will Clemente commented, Never seen anything like this. Soul ripping and everything on chain, nooking as people panicked off a phomo into Trump's meme coin. What is going on? We haven't seen anything remotely like this during this cycle. Salana's infrastructure creaked at the seams, with failed transactions galore and multiple exchanges closing their off-ramps.

Solana's token itself ripped by 30% to a new all-time highs, has traders scrambled to get in on the pump. And if you were watching on-chain across all chains, you could see prices dump across the board. The Trump meme coin was a liquidity black hole across the entire crypto ecosystem. Now let's touch on the tokenomics as they inform a lot of the conversation. The token launched with only 10% of supply available to the public and a further 10% provided to liquidity pools. that left 80% of supply reserved in earmarked for creators in CIC Digital, according to the published supply schedule. CIC Digital is the same firm that managed the release of the Trump-NFTs over the past few years. Essentially, as always happens, the FDV of the token was wildly misrepresentative, with the market

cap of circulating supply topping out at around $15 billion. That's still a crazy launch weekend for a meme coin and good enough to push the token into the top 20. And frankly, it's difficult to come up with anything in the same order of magnitude, the largest ever NFTment generated around $300 million in sales, and the EOS ICO raised around $4.1 billion. There is lots of speculation around how much Trump personally profited from the launch of the meme coin, but very little in the way of facts. Mark of Intelligence reported the events of Friday night as, quote, Trump's net worth quintuples overnight to $28 billion. They continued, Donald Trump's net worth is up $22 billion overnight, assuming CIC Digital LLC and Fight Fight Fight-Fite LLC, which collectively owned

80% of the Trump supply effectively belongs to him. At the current price of $28, that stake is worth $22.4 billion. Forbes estimated the president-elects net worth at $5.6 billion in November 2024. If this is accurate, the addition of the meme coin stake would be a 5x increase. And by the way, the meme coin more than doubled from that point. Still, as anyone in crypto knows, the idea that Trump pocketed tens of billions of dollars from the meme coin launch is not actually what happens in practice. That 80% of supply is locked for three months and then unlocks linearly over the next three years. Even if the supply was available to be sold, there's only enough liquidity to cash out a small

fraction without collapsing the price. Alas, many of you listeners will know that there is a vast difference between holding a fortune in a meme coin and having a fortune of cash in the bank. If you've been around Bitcoin for long enough, you've heard the term Hoddle and the name Lennon. Ledden has been the go-to leader in Bitcoin lending for over six years. They help clients unlock the liquidity of their Bitcoin, allowing them to hoddle while still accessing the wealth of their BTC. They've been battle-tested with their focus on transparency, security, and trust, allowing them to build a proven track record of client's success and security. Lennon has helped tens of thousands of clients harness the value of their digital assets,

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Still, the optics of the situation allowed for some truly aghast headlines. Indeed, for many in the industry, this was a deeply bad look. V.C. Nick Carter, who described himself to Politico as a, quote, avowed an explicit Trump supporter, told the publication, it's absolutely preposterous that he would do this. They're plumbing new depths of idiocy with the meme coin launch. Politico also cited an unnamed crypto lobbyist who said, it's awful. This is a horrible look for the industry already trying to make the case that were not a bunch of hucksters, scammers and fraudsters. Bitcoiners seemed appalled across the board. Veteran podcaster Peter McCormick

tweeted, Trump coin is embarrassing. It's the opposite of what you voted for. Even some of Trump's most avid supporters in the industry felt this was a troubling event. Former Masari CEO Ryan Selkis tweeted, I'd take a pay cut for a few years to help avoid these mistakes at a national level. You need crypto-natives in this administration or bad things will happen. Still another view on the topic was that it was unquestionably a paradigm shift for the industry regardless of whether it was good or bad. Chris Berniske at placeholder ventures wrote, Trump's meme coin clearly a lightning rod topic, and there's a huge amount of dispersion in the market as a result of it.

Haven't bought any, won't buy any, and am uncomfortable with the fact his orgs appear to own 80% of the supply. That said, this is the highest publicity meme coin launch we've seen yet, and that's catching eyeballs everywhere. It could be similar to Ethereum's The Dow Moment of 2016, which was a major lightning rod topic, but after raising 150 million very quickly, catching eyeballs everywhere,

I believe it to have catalyzed the ICO craze of 2017. Once people see the scale at which something can be done, it encourages them to experiment. Permissionless innovation is wild and messy and sometimes supremely cringe, but it is representative of society as a whole. I encourage everyone to see all sides of a situation and its ramifications, even if the knee-jerk reaction is negative. Investor Jonathan Wu wrote, two camps this morning. One, moralizing financial nihilism. Bad for crypto, bad for society. Two, acceptance and excitement. Crypto will lead everything, time to prepare. If you're in camp one, move to camp two ASAP.

Hasu, however, wrote, One of the worst things about crypto markets is how, through the power of incentives, it trains you to become a cynical rotator who believes nothing. Updating your priors in the light of new information so good, but changing your personality after the current thing is a terrible way to live that will lead to unhappiness. You can and should have values that never change, even if everyone around you disagrees. Whatever the case, we're clearly headed into a very different period of crypto history. While Trump's meme coin isn't going to change the world,

it's a clear demonstration of how powerful global liquidity can be. multiple foreign crypto companies are openly considering going public via a token rather than listing on their home country stock exchanges. While there's still no replacement for the NASDAQ or the New York Stock Exchange, it now for some might be an open question on whether you'd prefer to list on Solana or the Singapore Stock Exchange. Andrew Bailey, a fellow at the Bitcoin Policy Institute, wrote it's not an Overton window, it's a sliding door, and it's wide open. You have no idea how far this Overton sliding door goes. Other parts of the discussion? Many talks about whether the launch was actually, in fact, legal. It's probably not a coincidence.

that this meme coin launched as Gary Gensler was clearing out his desk at the SEC. Meltem DeMiris, for example, tweeted, we are doing crime again. Beyond strict legal issues, though, the launch has major implications for the political shape of the country. Dmitri Kofenis, the host of Hidden Forces, thinks this event heralds a profound shift in politics, tweeting. Crowdsourcing started as a way to support those who had fallen on hard times, as well as funding innovative startup ideas or interesting art. Crypto then took us from capital raises to pyramid schemes, as financial engineering overtook actual engineering, buying meme coins owned by government insiders is just the next stage of degeneracy in American capital markets as we move from

a capitalist economy to a patronage state. Axios discussed the likelihood that Donald Trump had violated the Constitution by enriching himself via the presidency. They noted that the world had changed since the 1700s and the Constitution, quote, hardly envisaged a world where a president could conjure billions of dollars of wealth out of nowhere just by endorsing a meme. Ultimately, though, the lack of traceability for meme coin trading and the Supreme Court's expansive view of presidential immunity, Axios concluded there probably won't be a prosecution. Summing up, they wrote, Trump just delivered a masterclass and the ability of a president to turn power into wealth. Still for others on CT, they believe that this was the clearest top signal we've ever

seen. Commenting on the vicious liquidity drain, Waz Crypto wrote, it's a pretty huge sign the doors are closing in, to be honest. When you see this and all the other coins are red and everything is being funneled into like three coins, you start to realize how thin liquidity really is, and how the hotball of money is just getting smaller, more violent, and greedier. Not everyone agreed, though. Bored Ape's co-founder Gordon Goner, who knows a thing or two about hype cycles wrote, The President of the United States launched a meme coin in your bearish, my dude, you have a legitimate mental disorder. Trader Rain tweeted, Jason Derulo launching a meme coin is a top signal. The president of the United States launching one is a vibe shift. Being a little bit more

analytical, Van Spencer of Framework Ventures, wrote, cycles begin in earnest when a gigantic pump is missed. Trump launching Friday night with no exchange support was genius and diabolical. Gains maximized while most would-be participants were literally asleep. The pump is now primed with FOMO, the cycle has now begun. Good luck. For some, the only meaningful thing to discuss was how much had changed. Rao Paul tweeted, the signal in the noise here is the velocity and simplicity of capital formation. Memes and ICOs before them were the test case, but the real game is yet to come, and it will completely revolutionize capital markets. Honestly, the event is of such magnitude that it's kind of a situation where you look at three people on crypto Twitter, and you'll get four

opinions. Everything from hope to excitement, to nihilism, to terror, to fomo, to disgust, all on display. And the one thing that's clear is that we are in for a wild four years. I don't think she was talking about the launch of the Trump meme coin, but I will end with sitting Senator Cynthia Lummis's words from January 15th. Just a little reminder as things are about to get crazy, emotions and excitement can run high. Don't send Bitcoin or crypto to some random wallet address or QR code. As ever, do your own research beforehand. or get your liquidity primed and get ready to FOMO in because it is about to get weird. For now, that's going to do it for today's breakdown.

Appreciate you listening as always. And until next time, be safe and take care of each other. Peace.