Some traders saw massive losses during the recent memecoin frenzy sparked by US President Donald Trump’s entry into the cryptocurrency space.
On Jan. 24, blockchain analytics firm Lookonchain flagged how a trader who withdrew more than $1 million in Solana (SOL) tokens from exchanges to trade memecoins lost almost all of it. The trader invested in 13 different memecoins, losing about $900,000.
Trader loses almost $900,000 on memecoins. Source: Lookonchain
Of the trader’s 13 investments, only one made a profit of $231. The trader lost more than $400,000 on Alon (ALON) and over $200,000 on Vinecoin (VINE), the official memecoin launched by Rus Yusupov, co-founder of the defunct American short-form video hosting service.
Traders lose funds on Trump memecoins
On Jan. 18, President Donald Trump launched an official memecoin project. The token launch sparked a trading frenzy, sending the memecoin to a market capitalization of nearly $9 billion a few hours after the launch. First Lady Melania Trump also launched a self-titled meme token, which performed well after launch.
While some made millions on TRUMP, others may not have been so lucky. At the time of writing, the TRUMP token was trading at around $34, about 53% down from its peak on Jan. 19. Meanwhile, the MELANIA token was at about $2, almost 80% down from its all-time high of $13 on Jan. 20.
Price chart for the Melania memecoin token. Source: CoinGecko
As the TRUMP token dropped, traders who bought high saw their funds plummet. On Jan. 21, Lookonchain flagged that a wallet linked to crypto influencer Ansem lost over $2.5 million on the TRUMP token. The wallet spent 9.3 million USD Coin (USDC) to purchase TRUMP tokens at $48. The trader sold the tokens at $35, ending with $6.8 million.
Many others seem to have lost funds as well. An X user claimed that one trader lost $20 million on the TRUMP token, while another said a trader lost $400,000 on MELANIA.
Related: World Liberty Financial secures Trump-related ENS domain names
Trump memecoins attract criticisms and calls for a probe
While some said that the TRUMP memecoins may signal a shift in crypto acceptance, others expressed concern over their potential negative impact on investors. Scam investigator Coffeezilla said most investors losing money on the tokens were not crypto natives.
Source: Coffeezilla
On Jan. 21, Democrat lawmaker Gerald Connolly of Virginia called on the US House Committee on Oversight and Government Reform to investigate whether Trump’s crypto projects conflicted with his duties.
On Jan. 22, Senator Elizabeth Warren asked US financial regulators and the ethics office to examine the ethical and legal concerns of the president and the first lady’s crypto tokens.
Magazine: Trump’s Bitcoin policy lashed in China, deepfake scammers busted: Asia Express