The Trump Memecoin Frenzy: A Cautionary Tale for Athlete Investors

KEY POINTS

• Whale Dominance: A small group of crypto whales dominated the Trump memecoin launch, capturing 82% of early trades and pocketing over $214 million in just 48 hours, while most retail investors either broke even or lost money.

• Ownership Concentration: Two Trump-affiliated entities control 80% of the token supply, raising serious concerns about price manipulation and future sell-offs that could destabilize the market.

• Memecoin Risks: The Trump token exemplifies how memecoins are often speculative, hype-driven assets that disproportionately benefit insiders and sophisticated traders while exposing casual investors to extreme volatility and losses.

👉 Bonus: Below you will find five ChatGPT prompts that you can use to develop your expertise in this area.

Athlete investors, drawn to the high-risk, high-reward nature of memecoins, should take a hard look at the recent Trump token saga before jumping in. At 9 p.m. on Jan. 17, then President-elect Donald Trump announced to his more than 8 million followers on TruthSocial that he was releasing his own crypto memecoin. The promise of fast money is undeniable—within minutes of its launch, the Trump memecoin surged past $70, reaching a staggering $15 billion valuation. But behind the hype, the reality was stark: a select few “whales” dominated early trading, cashing in hundreds of millions, while most retail investors were left holding the bag.

For those in sports who have made their wealth through discipline and strategy, the memecoin market presents an entirely different game—one where speed, insider access, and algorithmic precision dictate success. The Trump token episode isn’t just a crypto scandal; it’s a blueprint of how memecoin markets operate, often to the detriment of latecomers.

A Market Rigged from the Start

The Trump memecoin launch followed a familiar pattern. As soon as the token hit the market, 21 crypto whales—traders who purchased at least 500,000 tokens per wallet—swooped in. Within the first five minutes, they accounted for 82% of all trades and generated some $214.3 million in gains during the token’s first 48 hours in existence, a Bloomberg News analysis of millions of transactions shows. One particular cluster of wallets, identified as "Cluster A," executed a series of strategic buys and sells, netting an astounding $170 million in these first two days, telling a story of informed and well- timed transactions.

According to Bloomberg News analysis, the pattern was the following: „First, a single wallet – Wallet A – received transfers totalling about $1.1 million in the form of the USDC stablecoin about two hours before Trump’s post announcing the token. Then, roughly ninety seconds after the post on TruthSocial, Wallet A purchased about 6 million Trump tokens at 18 cents apiece.

That single purchase accounted for about 6% of the total available supply of 100 million tokens.

Then, a few minutes later, Wallet A sent all of its Trump tokens to a new wallet – Wallet B. That wallet then sent tokens to several other wallets at a rate of hundreds of thousands of tokens per minute. That group of wallets made periodic sales worth millions of dollars over the next two days, including when prices peaked at $78 on Jan. 19.

Later that day, as prices came off the intra-day lows to hover around $75, just off the peak, these assorted wallets that comprised Cluster A dumped about 1.7 million tokens over a three hour period. Wallet B sold a total of 650,000 Trump tokens in just three minutes."

The game was over before most investors even got started. These early whales had the advantage of capital, speed, and automated trading setups that allowed them to dominate the market. By the time retail traders jumped in, the price had already peaked. Whether buyers who jumped in later won or lost money on their trades was essentially a coin toss, the analysis shows. Within weeks, the token crashed by more than 60% (as of writing more than 70%).

For athletes looking to diversify their investments, this is a stark warning. Unlike real estate, franchises, or private equity—where diligence and research can provide an edge—memecoins are dominated by traders who operate on entirely different terms.

The Trump Token's Hidden Risks

Beyond the whale-driven profits, another critical concern looms over the Trump memecoin: ownership concentration. Two Trump-linked entities, CIC Digital and Fight Fight Fight LLC, control 80% of the token supply. While the official website claims these holdings will be unlocked over three years, this setup raises serious questions about future price stability.

“It’s completely abnormal to have a memecoin where 80% of the supply goes to founders,” says Shuyao Kong, co-founder of blockchain project MegaETH. “In fact, memecoins take pride in fair launch, meaning no insiders were able to acquire tokens before launch.” In this case, the Trump token breaks that rule entirely.

For investors, this concentration presents a massive risk. Should these entities begin offloading their holdings, the already volatile token could experience another severe price drop. For athletes considering memecoins as a speculative play, the Trump token serves as a case study in the dangers of limited liquidity and centralized control.

Why Athletes Are Vulnerable

Athletes are prime targets for high-risk investments. With significant disposable income and an appetite for bold financial moves, many have been drawn into the cryptocurrency space. Some, like Odell Beckham Jr. and Trevor Lawrence, have even opted to receive portions of their salaries in crypto. But memecoins are a different beast.

Unlike blue-chip cryptocurrencies such as Bitcoin or Ethereum, memecoins are driven almost entirely by hype, social media buzz, and speculative trading. The fundamental value of these tokens is often nonexistent, making them incredibly risky, especially for those without the time to monitor market trends 24/7.

Moreover, professional athletes often lack the sophisticated trading setups that whales use to gain an edge. Unlike hedge funds or proprietary trading firms, most athletes can’t deploy high-frequency trading bots or algorithmic strategies that capitalize on microsecond price fluctuations. “Many of the on-chain ‘whales’ are sophisticated traders and prop funds that have automated trading set-ups that allow them to buy new token launches early if the token fits a certain criterion, often related to momentum and liquidity, and then sell when they reach a certain level of return or hit another milestone,” said Rob Hadick, general partner at crypto venture capital fund Dragonfly.

This lack of professional setting makes athletes (and other less sophisticated market participants) ideal exit liquidity for more experienced traders. The Trump token’s trading data confirms this: while early whales extracted millions, most retail investors either broke even or lost money. This isn’t investing—it’s gambling against professionals with a stacked deck.

The Path to Smart Crypto Investing

None of this means that athletes should avoid crypto altogether. Many have successfully invested in blockchain startups, NFTs, and major cryptocurrencies. However, success in this space requires a different approach than the FOMO-driven buying that memecoins encourage.

Here’s how athletes can invest in crypto wisely:

Prioritize Blue-Chip Cryptocurrencies: Bitcoin and Ethereum have proven themselves over time. While volatile, they are far more resilient than memecoins that can implode overnight.

Invest in Infrastructure, Not Just Hype: Instead of betting on speculative tokens, consider investments in blockchain technology, decentralized finance (DeFi) platforms, or companies building real-world applications for crypto.

Seek Professional Guidance: Just as athletes work with financial advisors for traditional investments, they should consult crypto professionals before diving into the market. Understanding liquidity, tokenomics, and market manipulation is crucial.

Avoid Get-Rich-Quick Schemes: If an investment seems too good to be true, it probably is. The Trump token’s rapid ascent and crash are textbook examples of why meme-driven assets are unreliable long-term investments.

Educate Yourself: Before investing in any crypto asset, take the time to understand how it works. Read whitepapers, follow reputable analysts, and avoid making emotional decisions based on hype.

5 PROMPTS THAT ATHLETES CAN USE TO DEVELOP AND BUILD EXPERTISE

• Break down the key risks and rewards of investing in memecoins, using real-world examples like the Trump token launch.

• Explain how crypto whales influence memecoin markets, including their trading strategies and how retail investors can protect themselves.

• Analyze the role of ownership concentration in cryptocurrency projects and how it impacts price stability, using the Trump token as a case study.

• What are the most effective investment strategies for athletes entering the crypto market, and how can they differentiate between speculation and long-term value?

• Compare memecoins to blue-chip cryptocurrencies like Bitcoin and Ethereum in terms of volatility, risk exposure, and potential for long-term returns.

👉 Check ChampionsChat GPT for your prompts.

Final Thoughts: Know the Game Before You Play

Interest in the Trump token has waned since that heady first weekend between the launch and the presidential inauguration. But nearly 700,000 wallets still hold the token, and it ranks among the top 40 cryptocurrencies by market value, according to data aggregator CoinGecko — beating out many coins that have been around for years.

The Trump memecoin episode underscores a fundamental truth about speculative markets: those with the most knowledge, speed, and capital win. For athlete investors, the question isn’t whether crypto is a good investment—it’s whether they have the right tools to compete.

Memecoins, by their nature, favor insiders and algorithmic traders over casual investors. While the thrill of quick gains is tempting, the reality is that most end up losing. The Trump token isn’t just another crypto story—it’s a warning to those chasing fast money without understanding the risks.

Athletes have built their careers on discipline, strategy, and execution. The same principles should apply to their investments. When it comes to memecoins, the best play might be sitting this one out.

👇

I really appreciate you reading my note today.

Peace,

Irg

Irg’s work is provided for informational purposes only and should not be construed as legal, business, investment, or tax advice. You should always do your own research and consult advisors on these subjects. This work may feature assets and entities in which the author has invested.

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