The collapse of the Meme coin craze: When political power meets a chaotic market

No one receives compensation when a token issued by powerful figures loses 90% of its value from its peak within just a few days. This is the story of how a speculative bubble was exploited by influential holders, and how the crypto industry turned into an uncontrolled casino.

Crypto Gala in Washington: The Turning Point of Disdainful Meme Coins

During the weekend of this year’s presidential inauguration, Washington was immersed in an unusual party. At a private event near the Andrew W. Mellon estate, crypto experts, political lobbyists, and famous personalities gathered. Mike Johnson, Speaker of the House, took photos with KOLs; Donald Trump Jr. recorded a video; Snoop Dogg prepared to take the stage as a DJ.

But the real focus came from an announcement on Truth Social. The newly sworn-in President announced that he had just issued a cryptocurrency bearing his name – “TRUMP”. Immediately, attendees seemed puzzled – was this a hack, or a joke? But no, it was real.

Later that weekend, his wife, known simply as “Melania,” also launched her own token with a similar name. Within a few hours, the crypto holdings of the family exceeded $5 billion. But then, everything plummeted rapidly, leaving hundreds of thousands of retail investors suffering losses.

Analysts estimate that this group may have profited over $350 million. Critics called it a “conspiracy” to launder money of unknown origin; crypto traders accused it of being a scam. However, the new authorities repeatedly insisted that “everything is legal.”

Disdainful Meme Coin: An Uncontrolled Gamble of Nothingness

To understand the essence of this disdainful meme coin, we need to go back to 2013. Two software engineers chose an image of a Shiba Inu dog to create a token called “Dogecoin” – essentially a joke mocking the wave of cryptocurrencies. They didn’t expect investors to flood in, and within weeks, this coin reached a market cap of $12 million.

Disdainful meme coins fundamentally differ from any financial asset: they have no real product or cash flow. According to traditional valuation standards, they are completely worthless. The only way to profit from this token is to sell it to someone else at a higher price – in essence, “speculating on speculation itself.”

The most popular platform for creating tokens is Pump.fun. Its co-founder, Alon Cohen, 22, admitted that the platform has supported the issuance of about 1,400 meme coins, and transaction fees alone have generated around $1 billion in a year. Creating a token takes just a few clicks – no programming, no paperwork, no blockchain expertise needed.

However, behind this market lurk suspicious tricks: creating “illusion of activity” on social media, secretly paying influencers to promote, or immediately dumping when prices rise. Disdainful meme coins have become a form of “voluntary scam.”

Tracing the Creators: From Davis to Ng Ming Yeow

Bloomberg Businessweek investigated to find out who really controls the family’s meme coins. Clues led to Hayden Davis, a young advisor. Davis admitted he supported the issuance of the MELANIA token but claimed he didn’t profit.

However, as investigators continued tracking the blockchain – the public ledger of all crypto transactions – they found other evidence. Certain wallets with private keys bought large amounts of tokens immediately after issuance, earning tens of millions of dollars within hours. These wallets are linked to Davis and his team members.

The turning point came when Argentine President Javier Milei also issued a meme coin in February. This token collapsed shortly afterward. Nicolas Vaiman, a blockchain analyst specializing in tracing suspicious transactions, discovered that the wallets creating the Argentine token and the Melania token are connected. This suggests a group of people is responsible for managing both issuances.

Moty Povolotski, a former partner of Davis, later publicly revealed internal details. According to him, Davis received money from Meteora – a major crypto exchange – to support the issuance of these tokens. Meteora’s CEO, Ben Chow, is linked to Ng Ming Yeow, a Singaporean entrepreneur with an online avatar of an astronaut cat called “(biệt danh ‘Meow’)”.

Ng Ming Yeow: The Philosopher of Disdainful Meme Coins and the “Free Market”

Ng Ming Yeow, over 40, is the central figure of the story. He is not only the co-founder of Meteora but also developed Jupiter – another crypto trading platform. According to Blockworks, 90% of Meteora’s revenue last year came from trading meme coins.

When asked about the role of the platform in these controversial issuances, Ng Ming Yeow emphasized that Meteora only provides “technical support” and “does not participate in trading.” He defends the project by saying that the crypto industry is sometimes compared to “dirty things,” but one shouldn’t “throw out the baby with the bathwater.”

He has a unique philosophy: “Disdainful meme coins are not scams but pioneers of the new digital connection era.” According to Ng Ming Yeow, even the US dollar is a kind of meme coin, because its value is based on “people’s shared trust.” He envisions a future where “money can be infinite,” and each problem could have its own currency.

When the Meme Coin Bubble Bursts

By November, the disdainful meme coin craze began to cool down. Trading volume dropped 92% from its January peak. The TRUMP token fell 92% from its high, down to $5.9; MELANIA dropped 99%, to just $0.11 – nearly worthless.

Davis, once a star in the industry, has now disappeared entirely. Blockchain data shows his wallet still transacts, but his social media has stopped updating. Meanwhile, Ng Ming Yeow issued Meteora’s own token in October, which now has a market cap exceeding $300 million.

What happened?

Lawyer Max Burwick, representing many losing investors, called the disdainful meme coin craze a “ultimate value extraction machine” designed by a “highly talented” group. He has filed lawsuits against Pump.fun and related individuals, accusing them of engaging in “pump and dump” activities – artificially inflating prices through misleading promotion and then selling off.

Despite ongoing lawsuits, no regulatory agency has intervened in meme coins. The US SEC states they are “not regulated,” and the new government seems to be “loosening” crypto oversight. This creates a gap that exploiters can take advantage of.

The Trump family, while denying “conflict of interest,” continues to expand their crypto-related business portfolio. Eric owns a Bitcoin mining company; the family also promotes a plan for the government to buy strategic Bitcoin reserves.

As the disdainful meme coin bubble deflates, the crypto industry shifts to new “products” like “prediction markets.” Participants of the meme coin craze now leverage that experience and begin seeking new profit opportunities in a still largely unregulated market.