The enormous popularity of Donald Trump’s memecoin, TRUMP, is not only generating huge hype but is also driving the Solana (SOL) network to new highs .
Since the TRUMP token is based on Solana, investors must first acquire SOL to buy the memecoin. This has resulted in an impressive trading volume of 8 billion USD, helping Solana reach a new all-time high (ATH).
Since the token is in a price discovery phase, the price can change quickly.
Solana: The platform for memecoins
The Solana network has become a popular choice for creating memecoins in recent years. Since the launch of Pump.fun, demand for SOL has increased significantly. With its low fees and high transaction speed, Solana is an ideal platform for minting and trading tokens. This has led to spectacular increases in the value of memecoins such as Peanut the Squirrel (PNUT) and Popcat (POPCAT) earlier this year.
The value of SOL itself has exploded since the summer of 2023, when it was around 20 USD. Now the token is at a record high, thanks in part to the recent TRUMP hype.
Risks of the TRUMP token
It is at least striking that a future president would use his name and status to launch a memecoin. While early investors have made huge gains, the reality is that a large portion of investors will likely lose money.
One important point is TRUMP’s tokenomics. Two of Trump’s companies together own a whopping 80% of the token’s total supply, meaning that he and his inner circle have enormous influence on the price. This not only poses risks for investors, but could also lead to Trump himself profiting significantly financially from the project.
Conclusion
The launch of Trump’s memecoin has given Solana a significant boost, reaching a new record. But the TRUMP token also comes with risks, with centralized control of the tokens being particularly worrying. Investors should carefully weigh the risks before jumping into the hype.
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