Trump’s Memecoin: A Major Warning Sign for Crypto

|January 28, 2025
The Official Trump Meme Coin displayed on mobile device

The President of the United States launched a memecoin the day before taking office.

That’s not a sentence I ever expected to write. But here we are.

We will not get into the many ethical reasons that he shouldn’t have done that, why it means he has the wrong people advising him on crypto policy, or the massive conflicts of interest the token launch implies.

Rather, we will look at what happened through a sentiment lens…

As it reminds me of an event from the last crypto bull run… telling us where we are in this crypto cycle.

Crash Course

If you aren’t familiar… memecoins are cryptocurrencies inspired by internet memes, cultural phenomena, or viral trends.

Unlike Bitcoin or Ethereum, which aim to solve real-world problems, memecoins typically have no inherent utility or technological breakthroughs. Their value is derived almost entirely from hype, humor, and social media buzz.

Think of them as the financial equivalent of a joke going viral – they catch fire because people love the absurdity, and that momentum can sometimes generate life-changing gains.

The most famous examples are Dogecoin (DOGE) and Shiba Inu (SHIB). Dogecoin started as a joke in 2013 but skyrocketed in 2021 during the crypto bull market, thanks to endorsements from figures like Elon Musk.

Dogecoin

What began as a parody coin hit a market cap of over $80 billion at its peak.

Similarly, Shiba Inu, branded as the “Dogecoin Killer,” rode the memecoin hype to become one of the top-performing assets of the 2020-2021 bull cycle, turning early investors into millionaires.

While memecoins may seem like a joke, their track record in crypto bull markets is nothing to laugh at. They often deliver some of the largest percentage gains during speculative rallies. This happens because their low price and viral potential attract retail investors, fueling parabolic moves that feed on themselves.

And now, Trump’s memecoin launch gives us a big sentiment clue as to where we are in the crypto cycle.

Echoes of the Past

I’ve gone on record multiple times saying we are likely in the bottom of the seventh inning of this crypto cycle.

And Trump launching his memecoin all but confirms that. We had a similar event in the previous crypto cycle when Elon Musk went on Saturday Night Live. During his appearance, he tried to “pump” Dogecoin (DOGE), a cryptocurrency he’d grown fond of.

This move by Elon was near the top of the last crypto bull cycle…

Mush on SNL

This is not a coincidence. Sentiment peaks and troughs are always near the peaks and troughs for the market cycle.

The trick is being able to recognize where you are in the market cycle.

We Are Firmly “Late Cycle”

Trump’s memecoin echoes this action and tells me we’re near a sentiment extreme. It also confirms my suspicion that we’re late in the crypto cycle.

However, my other indicators tell me we still have some room to run. The first is the net unrealized profit and loss (NUPL) indicator. This is a measure of the number of Bitcoin currently in profit.

And in previous cycles, it peaked when 75% of recently purchased Bitcoin are in profit (i.e. people are feeling very rich)…

Bitcoin: Net Unrealized Profit/Loss

And bottomed when 0% of recently purchased Bitcoin are in profit (i.e. people are feeling very poor). It’s currently at 57%, implying further upside.

Next, I keep close attention to Google searches

Bitcoin searches on Google

When tons of people are searching for Bitcoin on Google, it’s usually a good sign we’re near a market peak. For instance, in the previous cycle Bitcoin peaked in mid-2021 and – likely – bottomed in November 2022.

This nearly perfectly coincides with Google searches for Bitcoin. At present, we have yet to top previous cycle highs, implying further upside.

Interest over time

Lastly, I look closely at general sentiment. Thanks to my 500,000 social media followers, I can gauge easily how people are “feeling” about the market.

Judging by some of the comments on my latest Bitcoin video explaining why we are late cycle…

Comment from latest video

People are still extremely bullish despite two straight years of massive gains for Bitcoin.

Room to Run

My research shows we still have more upside this crypto bull run.

But investors should recognize where we are in this cycle. History shows that the final leg of any crypto bull market is often the most profitable – and the most euphoric. This is when sentiment reaches extremes, new retail investors flood in, and prices can double, triple, or more in a matter of months.

However, it’s also the stage where risk is highest.

While Bitcoin may still see significant upside, anything beyond that – like altcoins or memecoins – should be viewed as speculative rentals rather than long-term investments. These assets often experience parabolic moves higher but can just as quickly collapse when sentiment reverses.

I expect this bull market to peak sometime this year, and the smartest investors will start planning their exit strategies now.

If you’re buying anything that’s not Bitcoin at this stage, treat it like renting a surfboard – have fun riding the wave, but don’t get caught when the tide inevitably goes out.

Robert Ross
Robert Ross

Robert Ross’s unique style of clear and direct stock research helped him build a massive following in the investment research industry, starting his career at investment research company Mauldin Economics and quickly rising through the ranks to become one of the youngest chief analysts in the industry. Today, over a million investors turn to Ross every month for his take on investing, economics, and personal finance. He now shares his unique insights in Total Wealth and Manward Money Report.


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