Here’s why market liquidity has been drained following Trump’s meme coin launch:
🔸Trump’s meme coin gained massive attention, pulling liquidity from the broader market as hype-driven traders rushed in.
🔸Memecoins often rely on community buzz rather than traditional market fundamentals, making them susceptible to speculative behavior.
🔸Funds were diverted from other assets as investors flocked to Trump’s coin, decreasing overall market liquidity.
🔸The extreme volatility of such coins, fueled by speculation and sentiment, amplified this effect.
🔸Trump’s coin skyrocketed nearly 500% in value within a short time, drawing even more investors and further straining market liquidity.
🔸This created a feedback loop: rising hype inflated the coin’s price, attracting more participants and reducing available capital elsewhere.
🔸Trump’s coin highlights the rise of "PoliFi" (politics + finance) memecoins, blending politics, finance, and community-driven investment.
🔸Despite their high risk and volatility, PoliFi coins offer a novel way for people to engage with cryptocurrency and political movements.