The cryptocurrency market experienced significant volatility on Monday, coinciding with Donald Trump’s inauguration. Initial anticipation for potential mentions of crypto in his inaugural address transformed into disappointment as the topic remained unaddressed. This led to a sharp downturn across various digital assets.
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The CoinDesk 20 Index, a benchmark for the broader crypto market, saw a decline exceeding 5% during the ceremony. Bitcoin (BTC), the leading cryptocurrency, dropped from $106,000 to $101,000 before stabilizing around $103,000. Solana (SOL), a layer-1 blockchain network that had seen a surge in activity due to Trump-related memecoins over the weekend, suffered the most substantial losses among major altcoins, plummeting nearly 10% from its all-time high.
Trump-Themed Memecoins Plummet Following Inaugural Address
TRUMP, the official memecoin of Donald Trump launched on the Solana network last Friday, experienced a dramatic 30% plunge from $50 during the inauguration speech. Although it partially recovered, the token remained approximately 20% below its session high. MELANIA, a memecoin named after former First Lady Melania Trump and launched a day after TRUMP, suffered an even steeper decline, falling as much as 46% before regaining some ground. These dramatic price swings underscore the highly speculative nature of memecoins, particularly those tied to political figures.
Leveraged Positions Liquidated as Volatility Surges
The market volatility triggered mass liquidations of leveraged crypto trading positions. Data from CoinGlass reveals that over $700 million in derivatives positions across all digital assets were liquidated on exchanges throughout Monday. Long positions, bets anticipating price increases, accounted for nearly $500 million of the liquidated positions. Including the sell-off preceding the inauguration, total liquidations surpassed $1.2 billion in the past 24 hours, representing the largest deleveraging event of the year.
High Expectations and Subsequent Disappointment
The crypto community held significant expectations for a Trump presidency, anticipating more favorable regulatory policies for digital assets after years of uncertainty and crackdowns. The launch of Trump-affiliated memecoins just days before his inauguration fueled speculative trading and drew criticism from prominent figures both within and outside the crypto industry.
Nic Carter, founding partner at crypto investment firm Castle Island Ventures, expressed strong disapproval, stating that the memecoin launch represented “new depths of idiocy.” Congresswoman Maxine Waters, a leading Democrat on the House Financial Services Committee, also condemned the move, arguing that it exemplifies the negative aspects of crypto and undermines the industry’s efforts to gain legitimacy.
Market Uncertainty Remains as Trump Era Begins
The market reaction to Trump’s inauguration highlights the sensitivity of the crypto market to political events and regulatory expectations. While the absence of any mention of crypto in his speech led to immediate price corrections, the long-term impact of the Trump administration on the digital asset space remains uncertain. The significant volatility and liquidations serve as a reminder of the inherent risks associated with leveraged trading and the speculative nature of the cryptocurrency market.
