At a Glance
- Trump’s meme coin launched Jan 17, peaked at $14 B, now ~ $1 B.
- Hundreds of thousands of small investors lost money as the market crashed.
- Stablecoins, backed by the new GENIUS Act, now dominate crypto with a market value over $300 B.
- Why it matters: The shift shows how volatile memecoins can be and how new regulation is reshaping the crypto landscape, affecting investors and payment systems worldwide.
While perched on a Swiss alpine peak at a St. Moritz crypto conference, the author watched the fallout of Donald Trump’s newly launched meme cryptocurrency. The coin, which once surged to a $14 billion valuation, has since collapsed to about $1 billion, leaving many small investors with losses. Meanwhile, stablecoins, protected by the recently signed GENIUS Act, are taking center stage in the crypto world.
From Meme Coin Mania to Market Crash
Memecoins, often created for speculation, flooded the market last year, with platforms like Pump.Fun growing rapidly. A paper co-authored by Nagendra Bharatula of G-20 Group argued that a basket of 25 “bluechip memecoins” outperformed Bitcoin by 150 % in six months. The author noted that Trump’s coin reached a peak of $14 B two days after launch, but now sits near $1 B.
Hundreds of thousands of investors lost money, and Pump.Fun’s daily revenue is now barely more than a tenth of its January level.
- Trump’s meme coin peaked at $14 B.
- Current value is around $1 B.
- Pump.Fun revenue fell to about 10 % of January.
Stablecoins Rise Under the GENIUS Act
Stablecoins aim to hold a steady $1 valuation and are pitched as a cheaper way to make everyday payments. The GENIUS Act, passed in July, set new rules:
| Requirement | Detail |
|---|---|
| Asset backing | 1:1 low-risk assets (e.g., US government bonds) |
| Regulatory accounts | Must be held with a state or federal regulator |
| AML controls | Mandatory anti-money-laundering safeguards |
Richard Blumenthal said:
> “New laws are needed to establish crypto guardrails and safeguards, but this one is ineffectual or worse.”
Christian Catalini added:
> “The way stablecoins are designed today, I think it could do some damage. Under GENIUS, that becomes very, very narrow.”
The act spurred a surge in stablecoin circulation, from $250 B pre-act to over $300 B after. Treasury Secretary Scott Bessent projected the figure could rise to $2 T.
Industry Response and Future Outlook
Traditional payment processors and fintechs are entering the stablecoin space. In April, Mastercard announced a service that lets cardholders pay in stablecoin. Klarna launched its own stablecoin in November. Visa recently piloted a program for businesses using stablecoins for cross-border payments. A consortium of international banks, including Bank of America, is exploring a joint stablecoin.
As more entrants appear, margins for incumbent stablecoin firms are expected to tighten. Revenue scales linearly with coin circulation, so companies may need to share interest earnings with distribution partners. This squeeze could lead to consolidation, with smaller firms either acquired or exiting the market. Catalini warned, “Margins will be severely compressed. In the end, whoever has or builds the largest distribution will win.”
The upcoming CfC St. Moritz conference will focus on stablecoin regulation, design, and adoption. No memecoin will appear on the agenda.
Key Takeaways
- Trump’s meme coin collapsed from $14 B to $1 B, hurting many investors.
- The GENIUS Act has cemented stablecoins as the dominant crypto asset, boosting circulation to $300 B.
- Industry consolidation is likely as margins shrink and competition for distribution grows.
The shift from speculative memecoins to regulated stablecoins underscores how quickly the crypto landscape can evolve, reshaping both investment and payment ecosystems worldwide.
