U.S. President Donald Trump’s supporters have collectively lost over $12 billion in the past month following the dramatic collapse of the $Trump meme coin. The cryptocurrency, launched on January 17, 2025, as a symbol of support for Trump’s second term, initially soared in value but has since plummeted by over 80%, shrinking its market capitalization from a peak of $15 billion to $2.7 billion as of Thursday.
While many investors are reeling from steep losses, Trump appears undeterred. In a bold move on Sunday, the former president announced plans to create a U.S. Crypto Strategic Reserve, signaling his continued commitment to digital assets despite the recent turbulence. The proposed reserve will include established cryptocurrencies such as Solana (SOL), Cardano (ADA), and Ripple (XRP), aiming to solidify America’s standing as a leader in the global digital finance sector.
The announcement builds on Trump’s earlier executive order, “Strengthening American Leadership in Digital Financial Technology,” issued on January 23, 2025. The order directed the Presidential Working Group on Digital Asset Markets to accelerate efforts toward creating a national cryptocurrency reserve. Trump described the initiative as a pathway to revitalize the cryptocurrency industry following what he called “corrupt attacks” by the Biden Administration.
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“We’re going to make the U.S. the Crypto Capital of the World,” Trump said. “No more stifling innovation. We will bring back the prosperity of the crypto markets, and we’ll do it bigger and better than ever.”
To further boost his crypto agenda, Trump will host the first-ever White House Crypto Summit on Friday. The event will feature prominent founders, CEOs, and investors from the cryptocurrency sector, as well as members of the Presidential Working Group on Digital Assets. The summit is expected to unveil additional measures to support the industry and provide a platform for leading voices in digital finance.
A Cautionary Tale of The $Trump Coin Collapse
The $Trump coin’s implosion has highlighted the high-risk nature of meme coins, which often thrive on hype and celebrity endorsements but lack underlying value or practical utility. Many investors had purchased the token not only as a show of loyalty to Trump but also as a speculative bet on potential gains. However, the coin’s value tanked shortly after its peak, contributing to a broader cryptocurrency market downturn.
Melania Trump’s own venture into meme coins fared even worse, with her officially endorsed token plummeting by 94% since January 20. The collapse of both coins has led to intensified scrutiny from U.S. lawmakers, with Democrats proposing the “Modern Emoluments and Malfeasance Enforcement (Meme) Act,” aimed at preventing senior government officials and their families from launching meme coins.
A Wider Crypto Rout
The $Trump coin’s decline coincides with a broader crypto market slump. Bitcoin, the flagship cryptocurrency, lost 20% of its value following Trump’s inauguration, contributing to the overall bearish sentiment. Many argue that the lack of a clear strategy from Trump’s administration has exacerbated the situation, particularly his failure to establish a strategic Bitcoin reserve as initially hinted.
Sam Liccardo, a Democratic Congressman, criticized Trump’s ventures. “The Trumps’ issuance of meme coins financially exploits the public for personal gain and raises the specter of insider trading and foreign influence over the Executive Branch,” he said.
Will the Crypto Reserve Restore Confidence?
Despite the backlash, Trump’s proposed U.S. Crypto Strategic Reserve offers a potential lifeline for his digital finance ambitions. By focusing on established cryptocurrencies such as Solana, Cardano, and Ripple, the initiative could help stabilize market sentiment and demonstrate a shift away from speculative meme coins toward more credible digital assets.
Analysts, however, remain cautious. “This reserve could provide a much-needed anchor for U.S. digital asset policy, but it all depends on execution,” said Lisa Green, a senior analyst at CryptoWatch. “Investors will want to see clear regulatory guidelines and a structured approach, not just grandstanding.”
The forthcoming White House Crypto Summit may provide critical insights into Trump’s strategy. Industry insiders expect discussions to cover regulatory frameworks, market stability, and innovation incentives, all aimed at boosting the legitimacy and global competitiveness of the U.S. cryptocurrency sector.
However, Trump’s influence on the crypto market remains undeniable. Despite the $Trump coin debacle, his latest policy moves suggest a calculated pivot towards more established and resilient cryptocurrencies. Only time will tell whether this shift will restore investor confidence, and boost the performance of cryptocurrencies, particularly, bitcoin – which saw a rise following the announcement of Trump’s plans for a U.S. Crypto Strategic Reserve.