Summary Trump’s memecoin launch signals a shift towards legitimizing token-based capital formation, and regulatory dovishness in the U.S. Tokens offer unparalleled efficiency by eliminating intermediaries, reducing costs, and enabling instant issuance and trading, democratizing access to capital markets. Bitcoin and Solana are top picks for this cycle, with Coinbase and Robinhood as key equities benefiting from crypto adoption. The era of tokenized capital is here, and those who position themselves early can benefit greatly from the reshaping of capital markets and capital formation. Since the evening of 17 January 2025, social media has been abuzz with the news of a high-profile memecoin tied to President Donald Trump. The ticker is TRUMP . The token was launched at the time of a “ Crypto Ball ” celebrating the inauguration of President Trump, who is dubbed as “the first crypto president” thanks to his expressed support for the industry on the campaign trail. This is a highly unprecedented move from a former and incoming POTUS. What makes this situation more amusing is that the token launch happened just a few hours after Gary Gensler, officially departed from his position as Chair of the SEC. Gensler has been widely viewed as antagonistic towards crypto over the course of his administration. The criticism on social media amongst crypto circles over this token launch has been quite severe, even as the token price has performed extremely well. TRUMP went up to over a $70 billion fully diluted valuation. Then on 19 January, the MELANIA token was launched (a memecoin of former and incoming First Lady Melania Trump). MELANIA has reached a $11 billion FDV. I believe these actions by an incoming POTUS speaks volumes about the outlook of the crypto industry and the capital markets. This article is about breaking down the implications. Here’s the short version: Trump has legitimized token-based capital formation, possibly opening the floodgates for legitimate small businesses and entrepreneurs. Not only could this be the start of possibly the strongest bull market crypto has ever seen, but it also highlights that the procedure of capital formation is likely changing right before our eyes. This second point is, in my view, far more important than a crypto bull market. Launching a token is objectively a more efficient way of raising capital (as I will show ahead), and this method just received the greenlight from the most powerful politician in the world. If you are involved in capital markets in any way at all, you probably should pay close attention to what is happening. The Historical Challenge of Capital Formation For years, small businesses and entrepreneurs have faced significant barriers to raising capital. Traditional capital markets are riddled with high costs, complex regulations, and bureaucratic gatekeeping, making it highly costly for smaller entities to access funding. Public companies enjoy a lower cost of capital, partly because they have the scale to afford all the regulatory overhead required to become listed in public markets. In contrast, small businesses are often left out, even if they have honest intentions and viable business models. Crypto promised to democratize this process by enabling anyone to launch a token, but that promise has largely fallen short. Unfortunately, the core reason for this was the lack of regulatory clarity. Any honest business or entrepreneur who wanted to use crypto rails for capital formation was taking on a massive risk. As a result, crypto has proliferated with scams and speculative projects. The only real use cases in crypto have been facilitating the speculation of tokens (effectively serving as a casino). This situation has been the norm over the last 6 years. Trump’s Memecoin: Possibly Legitimizing Crypto As A Fundraising Tool Trump’s memecoin is a black swan event which breaks the current pattern. By leveraging his status and influence, Trump has demonstrated that tokens are a legitimate option, and can potentially be used to bypass the high hurdles of traditional capital markets. More importantly, he is signaling with his own action that the U.S. will become much more crypto-friendly. Now, I want to make it clear that this is not any kind of recommendation to buy Trump’s memecoin. What I am highlighting is that if the president can do this just days before taking office, then it literally opens the floodgates for anyone to do it. And perception is rapidly shifting towards the view that crypto is about to undergo a Renaissance moment with American de-regulation and adoption. Trump’s involvement gives credibility and official approval to the concept, signaling to entrepreneurs and small businesses that crypto tokens can be used for real-world applications. For instance: A bakery could launch a token, using profits to buy and burn the token, creating value for token holders via a deflationary token supply. This would be financially equivalent to a stock buyback. A farm could issue a token where staking yields are tied to agricultural profits. This would be financially equivalent to issuing dividends. Tokens can easily be tied to real-world cash flows of real-world business, moving beyond the speculation-driven business models that currently dominate crypto. With Trump paving the way, we could see an influx of businesses and entrepreneurs utilizing token-based models to accelerate the capital formation process. Why Tokens Are More Efficient Tokens offer unparalleled efficiency compared to traditional methods of raising funds. First and foremost, tokens eliminate the need for cumbersome intermediaries like investment banks, underwriters, and extensive legal teams, significantly reducing the cost and complexity of launching a capital asset. Unlike traditional fundraising mechanisms, which often require months of preparation and compliance with layers of regulatory hurdles, tokens can be issued and traded almost instantly, democratizing access to capital markets. Anyone can launch a token by paying less than $5 in blockchain network fees. Additionally, tokens enable better flexibility. They can be programmed with smart contracts to automate processes such as dividend distribution, buybacks, or staking rewards, reducing administrative overhead and enhancing transparency. Token holders can directly and immediately participate in the issuer's success, fostering a stronger alignment of incentives between businesses and their investors. Another advantage is that tokens can be traded 24/7 on globally accessible platforms. This creates better access and price discovery. Moreover, the total supply, all the holders and their respective transactions are all visible at all times on the public blockchain. When you tally it all up, launching a token is a more efficient method of capital formation in every conceivable objective metric of capital formation: Speed of execution Frequency, if there is a need to do it multiple times Cost to launch compared to value received from a launch Transparency of supply, holders, transactions Price discovery Accessibility If honest businesses aren't barred from tapping this avenue, then it absolutely helps them. And so far, honest businesses have been barred from tapping this avenue of capital formation because of regulatory uncertainty and hostility. Trump has arguably single-handedly reversed this dynamic. Now, I do want to make it clear that in order for this market to be fair and efficient, there does have to be trust in any business that is attempting a launch. Even though launching a token is very simple, procuring the documents for potential investors to review is harder. In the case of tokens, there may be less regulatory oversight and this allows people to conduct a capital markets transaction in a more peer-to-peer manner. A business can release the records they have and the plans they have. They can utilize Twitter spaces and social media to speak directly to the public, and interested individuals can invest in the token that was launched, or raise inquiries in the same public forums. In other words, the due diligence and transparency process is transferred from regulatory agencies like the SEC onto market participants. People can approach a token investment based on the risk tolerance they prefer and the due diligence they conduct. Businesses can raise capital in much smaller amounts at much faster speeds, and they need not worry about meeting the high bars set by regulators and regulated exchanges (which also includes very high fees to apply or list their securities). If an entrepreneur is able to quickly procure the things needed to convince his investors, he no longer needs to worry about filling hundreds of pages of forms for regulators and exchanges, and paying massive fees to attorneys in the process. He can simply identify his investor set and launch a token, while upholding his end of the bargain to accrue value to the token once his business starts becoming profitable. To the government, this is also arguably a much more preferable option. Regulatory offices cost a lot of taxpayer money. If people want to launch tokens for their businesses and others want to invest in the token, then it makes sense to just let everyone do what they want to do with their own money and time, save on all the expense of having a lot of regulators, and then come back to collect tax revenue once the ventures have succeeded. By lowering the cost to access capital and by bypassing traditional gatekeepers, crypto can create a freer, more efficient market where honest businesses thrive, and bad actors are increasingly identified and ignored. This shift could mark the beginning of a new chapter for crypto, where the focus moves from speculation to real-world utility. It would also mark the start of a monumental change in how smaller enterprises can access capital markets. Picks for This Cycle As token-based capital formation gains traction, the broader crypto market is likely to experience significant growth. However, not all cryptocurrencies are positioned to benefit equally. I believe Bitcoin (BTC-USD) and Solana (SOL-USD) are the best crypto picks. Coinbase ( COIN ) and Robinhood ( HOOD ) are the equities that can benefit disproportionately from this trend. Bitcoin Bitcoin remains the ultimate decentralized digital commodity. As token-based fundraising grows, BTC’s role as the reserve asset of crypto is likely to strengthen. Institutional adoption, regulatory clarity, and its integration into traditional finance further solidify its position as a must-have asset for long-term investors seeking exposure to crypto. The importance of BTC really cannot be understated. I view it as far bigger than the rest of crypto because it has the potential to become a global monetary asset. The use of BTC as a reserve asset in corporate treasures is also a trend that is continuing. More companies are adding BTC to balance sheets and this trend is very likely to accelerate now that institutional acceptance of BTC via ETFs, options, futures, and FASB accounting treatment of digital assets. So the best way by far to play this crypto cycle is to simply own BTC. Solana Solana is emerging as the chain of choice for token launches, including the TRUMP and MELANIA memecoins. Solana has fast transaction speeds and low fees. Total value locked on the chain has continued to climb and is gaining market share from the other chains. TVL (Defillam) Solana has become a hotbed for memecoin activity, and its infrastructure supports businesses looking to launch tokens efficiently and affordably. These flows accrue value to the SOL token because SOL is used to pay for all blockchain network fees on Solana. Also, in the major token launchpads on Solana, SOL is the asset that is used to trade against the newly launched tokens. In other words, rather than XYZ-USD, the pair will be XYZ-SOL. In contrast, Ethereum (ETH-USD) is somewhat losing ground. Higher gas fees and network congestion make it less appealing for the next wave of token-based capital formation. Ethereum faces the larger question of L2’s becoming cannibalistic to blockspace and therefore not actually accruing value to the ETH token. Without getting into weeds on this, the bottom line is that there is likely more upside in SOL than in ETH. After TRUMP was launched on Solana, ETH actually lost value and the SOL-ETH pair traded much higher and the BTC-ETH pair reached a low that it hadn’t reached in years. It really seems like people are becoming increasingly bearish on ETH and viewing Solana as the chain where things will happen. I expect that SOL will flip ETH in market cap within the next 2 years. Coinbase and Robinhood Both COIN and HOOD are pick and shovels equities plays for crypto adoption. I was quite surprised that Robinhood moved so fast in listing TRUMP. While initial token launches can only be purchased by participating on-chain with a crypto wallet, as the tokens get larger they eventually get listed on crypto exchanges. COIN and HOOD can make a lot of money here. To get the assets to fund a crypto wallet, a user generally needs to buy it from a venue like COIN and HOOD. If a user wants to trade tokens without a crypto wallet, then they can just trade it natively in the Coinbase or Robinhood app. It’s easy to see that these two stocks could benefit from a crypto-friendly U.S. regulatory climate. Risks There is a chance that Trump’s memecoin launch has emboldened scammers without providing confidence to honest businesses. In this case, we could see a proliferation of scams, and this would be bad for the industry. Despite Trump’s high-profile involvement and signaled support, regulatory uncertainty in other jurisdictions remains a possible challenge. Crypto is global, so government crackdowns on token launches could hinder price performance. In the long term, it is safe to say that most other larger developed economies tend to follow the U.S. lead. I think another market risk that needs to be discussed is the risk to public equities. This development is so new and rapidly moving that it is tough to make a decisive call on what will happen. Directionally, I believe it is somewhat bearish for smaller cap stocks in more “innovative” sectors like tech and consumer discretionary. If tokens truly unlock unprecedented capital formation opportunities for smaller businesses, then it would mean that some attention and capital is pulled out of public markets and into crypto. This could be a long-term headwind for small and micro caps. Being publicly traded, these companies cannot move as quickly as to launch their own tokens to benefit from this trend. The best they can feasibly do is to adopt a BTC treasury. The Bottom Line Token-based capital formation is likely coming. By breaking regulatory taboos and legitimizing the use of tokens, Trump has opened the door for businesses to raise capital using far more efficient rails. This shift could catalyze a new wave of crypto adoption, creating opportunities for investors and businesses alike. For those looking to capitalize on this trend, BTC, SOL, COIN, and HOOD stand out to me as top picks, though I think focusing on BTC is the best choice. These assets are poised to lead the way, offering exposure to adoption, de-regulation, and innovation. If the era of tokenized capital is here, then those who position themselves early can stand to benefit greatly from the reshaping of capital markets and capital formation.
