Memecoins and Market Manipulation: How Libragate and TRUMP Changed Crypto Forever
- Professor Scott Durant
- Mar 16
- 4 min read
Memecoins have rapidly evolved from a niche internet joke to a multibillion-dollar financial asset, disrupting traditional finance and reshaping cryptocurrency market cycles. Initially dismissed as gimmicks, these digital assets have demonstrated an unparalleled ability to capture investor attention, drive mainstream crypto adoption, and influence both financial and political narratives.
However, memecoins remain highly speculative, vulnerable to hype-driven bubbles, and exposed to insider manipulation, as evidenced by the Libragate scandal and the volatile performance of Trump’s TRUMP memecoin.
This article provides a deep dive into the evolution of memecoins, the impact of recent market trends, regulatory perspectives, and the potential future of these digital assets.
A Historical Overview of Memecoins
The Birth of Memecoins: From Joke to Market Leader
The memecoin phenomenon began in December 2013 with the launch of Dogecoin (DOGE), a cryptocurrency inspired by the famous "Doge" meme featuring a Shiba Inu dog. Created by Billy Markus and Jackson Palmer, Dogecoin was initially meant as a satire of Bitcoin’s speculative nature.
However, Dogecoin quickly became a community-driven project, used for tipping online content creators and charity fundraising. Despite its origins as a joke, Dogecoin surged in popularity, reaching an all-time high market capitalization of $88 billion in 2021—surpassing the valuation of many established financial institutions.
The 2020–2024 Boom: The Rise of the Memecoin Market
The success of Dogecoin led to an explosion of new memecoins, each leveraging internet culture, viral marketing, and community-driven speculation. The most notable ones include:
Memecoin | Launch Year | Blockchain | Peak Market Cap | Notable Features |
Dogecoin (DOGE) | 2013 | Litecoin Fork | $88 billion | First memecoin, community-driven |
Shiba Inu (SHIB) | 2020 | Ethereum (ERC-20) | $41 billion | "DOGE killer," DeFi ecosystem |
Floki Inu (FLOKI) | 2021 | Ethereum & BSC | $3 billion | NFT gaming & metaverse |
Bonk (BONK) | 2022 | Solana | $1.5 billion | Community-focused, free airdrops |
PepeCoin (PEPE) | 2023 | Ethereum (ERC-20) | $2.1 billion | Meme-based speculation |
By late 2024, memecoins had captured a significant portion of the crypto market, accounting for 65% of total trading volume on decentralized exchanges like Raydium and Uniswap.
The market peaked in December 2024, reaching an all-time high of $124 billion. However, this speculative boom was followed by a sharp decline, with the total market capitalization of memecoins dropping to $54 billion by March 2025.
The 2025 Memecoin Crash: TRUMP, Libragate, and Market Manipulation
Trump’s Memecoin: A Political Experiment in Crypto
The launch of the TRUMP memecoin on January 18, 2025, created a massive wave of speculative investment. With direct association to U.S. President Donald Trump, this token attracted both crypto traders and political supporters, pushing weekly trading volume to an all-time high of $3.3 billion on Pump.fun.
However, the memecoin's extreme volatility led to massive liquidations, causing:
A 63% drop in trading volume between January and February.
A loss of billions in speculative bets, wiping out many short-term traders.
A market shift away from memecoins, with capital flowing back into Bitcoin (BTC), Ethereum (ETH), and Layer-1 altcoins.
Libragate: The Insider Scandal That Shattered Investor Trust
While the TRUMP memecoin’s volatility hurt investor confidence, it was LIBRA (associated with Argentine President Javier Milei) that truly shattered the illusion of memecoins being fair investments.
The LIBRA memecoin scandal, dubbed "Libragate," revealed insider manipulation on an unprecedented scale. Within hours of launch, insiders cashed out over $107 million, causing the token’s value to plummet by 94%.
Incident | Date | Initial Market Cap | Insider Profits | Market Reaction |
Trump Memecoin Volatility | Jan 2025 | $3.3B in trading volume | Billions in liquidations | 63% drop in memecoin activity |
Libragate (LIBRA) | Feb 2025 | $500M+ | $107M insider cashout | 94% token crash |
These incidents highlighted the structural flaws in the memecoin market—specifically, how lack of oversight allows insiders to manipulate valuations at the expense of retail investors.
Regulation and the Future of Memecoins
SEC's 2025 Stance: No Regulations, But Warnings
In response to the Libragate scandal, the U.S. Securities and Exchange Commission (SEC) issued a formal statement, clarifying that memecoins are not classified as securities. However, the SEC warned that:
"Fraudulent conduct related to the offer and sale of memecoins may be subject to enforcement action or prosecution by other federal or state agencies."
This pro-crypto stance, aligned with the Trump administration’s deregulatory approach, has led to mixed reactions in the crypto community:
Supporters argue that deregulation fosters innovation.
Critics warn that lack of oversight will lead to further insider manipulation and rug pulls.
The Future of Memecoins: Extreme Power Law & Survival of the Fittest
According to CoinGecko founder Bobby Ong, memecoins are inherently seasonal assets that follow extreme market cycles. He predicts an “extreme case of power law,” where:
99.99% of memecoins fail and disappear.
Only a handful of memecoins—DOGE, SHIB, BONK—will survive future market cycles.
The key to survival for any memecoin will depend on:
Decentralized Governance (DAOs): Memecoins adopting DAOs could ensure fair token distribution.
Real Utility & Adoption: Memecoins must transition beyond speculation to offer real-world use cases.
Institutional Acceptance: The integration of memecoins into mainstream financial systems could drive longevity.
Are Memecoins Here to Stay?
Memecoins have proven their ability to shape market trends, attract mainstream attention, and even influence political narratives. However, recent scandals like Libragate and TRUMP’s volatility highlight their inherent risks.
While most memecoins will likely fade away, a few dominant players like Dogecoin and Shiba Inu will endure. The question remains:
Will memecoins evolve into long-term financial assets, or will they remain speculative bubbles?
To understand the future of digital assets, artificial intelligence, and emerging technologies, follow insights from Dr. Shahid Masood and the expert team at 1950.ai.
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