Crypto Assets Market Unleashes New Wave: Incoming President Launches Unique memes

On January 18, Donald Trump announced the launch of his exclusive crypto asset meme coin $TRUMP via social media, causing a sensation in the crypto asset market. This new coin surpassed a market cap of $24 billion on its first day of issuance, becoming the focus of the market. From ordinary investors to seasoned traders, nearly everyone has shown great enthusiasm for this meme coin with a strong personal touch.

Memes are a type of Crypto Assets designed based on internet culture, characterized by high entertainment value and viral spread. They often revolve around hot figures or events, attracting investors' attention and emphasizing market sentiment rather than actual economic function. From the early Dogecoin to the recent $Pepe, the rise of memes has always been inseparable from the public's "speculative frenzy." The launch of $TRUMP, with its strong personal brand effect and unique combination with political factors, has brought the entire meme market to new heights.

According to the statement from the issuing team, $TRUMP aims to "celebrate a leader who does not back down in the face of adversity." This meme coin not only centers around Trump's political image but also incorporates his experience of being targeted for assassination during the 2024 campaign in its narrative, further stirring emotional resonance in the market. Combined with Trump's commitment to supporting the Crypto Assets market, investors are filled with expectations for the future of $TRUMP.

$TRUMP is unique in that it is a meme coin directly issued by Trump in his capacity as President-elect, marking a groundbreaking move in both the Crypto Assets market and the political arena. From multiple promises to implement a series of policies favorable to Crypto Assets during his term, to participating in investments in various mainstream Crypto Assets, and issuing related NFTs and VC coins, Trump and his family have deepened their involvement in the Crypto market. The issuance of $TRUMP this time signifies that Trump chooses to ride the wave of meme coins, personally entering the game in the most down-to-earth way as President-elect. As the first president to issue a meme coin, Trump injects his political influence directly into the meme coin market through this unconventional behavior, showcasing his high recognition of Crypto Assets and helping Crypto Assets further 'break the circle', attracting more attention and capital, thereby releasing positive signals for the Crypto market in terms of policy prospects and liquidity.

However, behind this meme coin frenzy lies not only the wealth effect and political signals but also complex compliance risks. In an era where Crypto Assets are increasingly being taken seriously by governments around the world, Trump's move undoubtedly pushes Crypto Assets directly into the spotlight for scrutiny.

In terms of securities regulatory risks, a key question is: does the meme coin belong to securities? This is an important factor affecting its legality. In the United States, crypto assets issued through ICOs are considered securities and are subject to strict regulation. The Securities and Exchange Commission (SEC) typically uses the Howey Test to determine whether an asset constitutes a security. This test includes four elements: investment of money, expectation of profits, common enterprise, and efforts solely from others. From the current situation, although the Trump team publicly issued $TRUMP and received purchases from investors, it has stated on its official website that this crypto asset does not belong to securities and has not promised future profit potential, making it difficult to classify $TRUMP as a security. However, the SEC's stance on meme coins has not been clearly defined, and if $TRUMP's actual performance exhibits characteristics of a security, it may still be subject to investigation and regulation.

Secondly, there is the issue of tax compliance. According to the IRS, the capital gains from investing in Crypto Assets are considered taxable income. The 80% $TRUMP held by the Trump team will be unlocked in batches over the next three years, which poses significant challenges for their tax compliance. First, it is worth noting whether the unlocking of $TRUMP constitutes a taxable event. U.S. tax law states that capital gains tax obligations are triggered only when assets are disposed of. Therefore, the unlocking of Crypto Assets itself is generally not considered a taxable event unless the Crypto Assets are sold or used for transactions. Once the Crypto Assets are traded on the market or converted into other assets, capital gains must be calculated based on the market price at the time of the transaction, and taxes must be paid. After the unlocking of $TRUMP, how to determine its cost basis is another tricky issue. In U.S. tax law, the calculation of capital gains tax is based on the cost basis of the asset, which is the price at the time of purchase. However, due to the significant price volatility of $TRUMP, determining the cost basis of the Crypto Assets can be very complex. Particularly, if the Trump team chooses to sell these Crypto Assets in batches, the timing and market price of each transaction will affect the calculation of capital gains. Without properly recording the details of each transaction, this will create substantial difficulties for tax reporting.

Additionally, the issuance of memes may trigger controversies regarding political donations. In the United States, the Federal Election Commission (FEC) has strict transparency requirements and limits on political contributions. If $TRUMP is used as a tool for raising political funds, it is likely to circumvent the existing regulatory framework and cross legal red lines. Currently, although there is no conclusive evidence proving that any companies or individuals intend to purchase $TRUMP as a form of political donation, the behavior of such politicians issuing memes and making substantial profits could still severely impact the current political donation order in the United States, and Trump may also face suspicions of indirect corruption. It is worth noting that Trump's choice to issue coins before officially taking office may be an attempt to avoid external accusations of misusing public power and monetizing authority. However, even so, this issuance may bring numerous negative effects, especially if the coin's price significantly drops, Trump's political credibility could be severely damaged.

Trump's launch of $TRUMP is undoubtedly a bold experiment with both political significance and market impact, and it aligns perfectly with the political image he has crafted for himself. From the market performance perspective, $TRUMP has successfully ignited investment enthusiasm in a short period of time, attracting countless attention for memes, and possesses unprecedented influence. However, in the face of FOMO and FUD, people should remain rational, paying attention to both the economic risks of investment behavior and its legal and compliance risks. After all, the premise of "going all in on meme to occupy the palace" is to stay in the game.