How Memecoins Influence the Broader Crypto Market : The $TRUMP Case.

Hi everyone. How are you? Greetings from the PussFi 🐈 community once more on my blog.

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• Introduction

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Although volatility has always existed in the cryptocurrency market, the rise of memecoins has brought out new dynamics that affect investor emotions, liquidity, and even the price fluctuations of popular assets like Ethereum and Bitcoin.

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The introduction of the $TRUMP token, which has attracted much attention, is one recent example of this move, just 2 days ago we spoke about the influence of celebrity endorsement in memecoins.

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The Token Phenomenon of $TRUMP

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USA President-elect Donald Trump launched the $TRUMP memecoin on the Solana blockchain on January 18, 2025, at 2:00 AM UTC. After starting at $0.18, the token's value increased by more than 300% in hours, reaching an all-time high of $21.51 and a $8 billion market valuation.

This quick rise shows the powerful effect of prominent figures in the memecoin space, and I could tell with a fact right now that there is still more of this gearing in the coming days.

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The effect on liquidity

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When an established memecoin like $TRUMP is introduced, it might have a big impact on market liquidity. The trading volumes of the token came close to $1 billion shortly after launch, indicating a significant inflow of capital.

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As traders redirect funds to take advantage of fresh possibilities, this activity may drain liquidity from other cryptocurrencies as we have where general tokens are down by -20% over the day, meaning people are taking cash out of use cases coins to buy memecoins.

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Market dynamics and investor sentiment

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Launches of memecoins often lead to increased investor excitement, which encourages speculative trading. The quick rise in the value of the $TRUMP cryptocurrency is a prime example of how celebrity endorsements may influence market sentiment and draw in both experienced and novice investors.

But this enthusiasm can also lead to volatility because quick price increases can be followed by just as quick corrections.

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Impact on Ethereum and Bitcoin

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A widely recognised memecoin may have repercussions for other well-known cryptocurrencies, such as Ethereum and Bitcoin. Bitcoin saw a positive market reaction after the launch of the $TRUMP cryptocurrency, trading above $104,500. Although it might be difficult to prove causal causation, ETH on the other hand is finding it difficult to keep up given the fact that people are moving to SOLANA because of its easy access to purchasing memecoins.

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The concurrent time implies that circumstances involving memecoins may have an impact on more crypto general market trends.

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• Conclusion

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Memecoins can have a big impact on the larger cryptocurrency market, as seen by the introduction of the $TRUMP token.

Memecoins have real asset significance to the developing cryptocurrency ecosystem because they have an impact on the distribution of liquidity, investor mood, and possibly the price movements of prominent assets as well, so it is high time we stop thinking memecoins are just for fun, but they have the same role as other crypto assets.

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