Investing.com — The cryptocurrency market is in a stir following the launch of Donald Trump’s $TRUMP meme coin, which saw its value rise by more than 11,000% since launching on Friday. The coin reached a market cap of $66 billion by Sunday afternoon, marking Trump’s daring entry into the digital asset and merchandise sales field before his impending inauguration on Monday.

The $TRUMP coin was announced on Truth Social late Friday and was presented as a commemoration of Trump’s presidential election victory. The coin, which is based on the blockchain platform, started with a limited supply of 200 million coins. According to the coin’s official website, the supply is expected to increase to 1 billion over the next three years.

The dramatic rise of $TRUMP has created a lot of chatter, but Nigel Green, CEO of deVere Group, advises caution. Green said, “This is a revival of the meme coin trend we saw in 2021 and 2022, where many young, inexperienced investors got burned by extreme volatility. Without doubt, investors will get burned by this frenzy too.”

Green pointed out the speculative nature of meme coins and warned that their values can swing drastically. He clarified that while big profits can be made by some, this type of investment is inherently high-risk and unpredictable. He stated, “Let’s be very clear: this is more gambling than investing. If you’re considering getting involved, you need to have a sound, diversified, long-term plan in place first.”

The swift rise of the $TRUMP coin highlights the risks associated with meme coins, which are less influenced by fundamentals and more by social media-driven hype. Green likened the phenomenon to gambling, stating that many day traders are likely joining in, hoping to capitalize on Fear of Missing Out (FOMO). He said, “They’re mostly not buying because they think the coin has inherent value. They’re buying because they hope others will drive the price higher, allowing them to sell at a profit.”

Green emphasized that this strategy comes with significant risks, and that meme coin valuations are likely to fluctuate wildly. He added, “Understand the real risks to your money. This is not the same as investing in sound assets. Gambling is not the same as investing.”

Despite the buzz around $TRUMP, the launch could signal a crypto-friendly approach from the forthcoming Trump administration. There are speculations that Trump’s venture into the digital asset space aligns with his government’s likely favorable stance on cryptocurrencies, which could potentially lead to further adoption and innovation in the sector.

Green remains positive about the wider implications for the crypto market, stating that a pro-crypto administration could speed up the adoption of digital currencies and blockchain technology. He said, “This will have long-term benefits for the economy. But it’s important to distinguish between speculative meme coins and legitimate digital assets that provide real value and utility. If you do want the thrill or novelty of chasing big gains, ensure it’s part of a diversified strategy and not your main plan.”

As the market responds to this latest development, $TRUMP’s quick rise underscores the broader debate about the role of cryptocurrencies in the current financial landscape. Green concluded, “Trump’s presidency is expected to usher in an era of pro-crypto policies, and while this could pave the way for legitimate growth for established assets like , it also raises questions about the risks of speculative trading driven by social media hype.”

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.