The Official Trump meme coin has collapsed to a record low as on-chain data show that the most profitable investors have exited.
Official Trump (TRUMP) price crashed to a low of $27 on Saturday, down by about 63% from its all-time high. This plunge has dropped its market cap from $14 billion to $5.3 billion.
Most TRUMP meme coin whales dumped the token
On-chain data reveals that, as with most meme coins, the biggest whales have exited their positions, leaving many retail traders holding the bag.
Nansen data shows that the most profitable Official Trump investor made $53 million and has already sold all the tokens. The second investor made $52 million and has sold about 70% of his assets worth $44 millin.
The third investor made a profit of $42 million and has sold $30 million. He still holds tokens worth $12 million, possibly because he expects its price to rebound. The rest profitable investors have sold most of their tokens.
These sales happened because of the speed in which the token jumped before the inauguration. The liquidation was, therefore, because these investors understand that most meme coins crash after the initial frenzy ends. Besides, the token has no intrinsic value.
More data show that smart money investors, who are more sophisticated than retail investors basedon their experience. The number of these smart money investors has dropped from 340 last week to just 130 today. Tokens held by these investors have dropped from almost 30 million to 14.4 million.
Potential legal issues for Trump
The ongoing plunge of the TRUMP and MELANIA (MELANIA) meme coins has attracted scrutiny in Washington. Elizabeth Warren, a senator from Massachusets, together with Rep. Jake Auchincloss, have called upon authorities to investigate the TRUMP tokens.
Their worries involve market manipulation concerns and the fact that foreign actors may buy the tokens and influence the U.S. president. It is unclear whether the US Office of Government Ethics and the Securities and Exchange Commission will launch the investigation.
A hypothetical lawsuit against Trump and Melania may come from investors who lost money. Just recently, aggrieved investors filed a lawsuit against Hawk Tuah Girl after her HAWK token crashed. These investors accused her for promoting an unregistered security. A lawsuit against Trump and the first lady would also lead to more sell-off of their meme coins.
