Morning wrap (20.01.2025)

Stock indices from the Asia-Pacific region are trading with improved sentiment at the start of the new week. Chinese indices are up around 0.90-1.00%. The stock market in Japan is also seeing gains, with the JP225 index rising 0.35% to 38,880 points. Singapore’s SG20cash index is up 0.05%, while the Australian AU200cash index remains largely unchanged.

Futures contracts for European indices indicate a mixed opening for the cash session. The German DAX index is up 0.05%, holding above 21,000 points, the UK100 index is down 0.15%, and the EU50 index has gained 0.08%.

In the U.S., stock exchanges will remain closed today due to the Martin Luther King Jr. federal holiday.

The most significant event of the day is, of course, the inauguration of Donald Trump as the President of the United States, scheduled for 5:00 PM GMT (12:00 PM ET).

In the currency market, the dollar is the weakest performer in the early part of the day. The USDIDX index is down 0.25%, trading at 108.9000 points, while EURUSD has gained 0.27%.

Over the weekend, we witnessed an unprecedented situation. On Friday evening, Donald Trump unexpectedly announced the launch of his memecoin, Official Trump, which reached a fully diluted valuation (FDV) of $75 billion within 48 hours. Currently, only 20% of the tokens are in circulation, an unusual scenario for memecoins. The remaining 80% are held by companies associated with Trump and are set to be gradually released into the market over the next three years.

The launch of Official Trump drained liquidity from other cryptocurrencies, causing double-digit losses across altcoins throughout the weekend. Bitcoin also experienced minor losses.

An indirect beneficiary of this development was Solana, as Trump chose this blockchain for his memecoin. Over two days, Solana reached a new all-time high (ATH) of $295 per token, gaining nearly 50% within 48 hours.

Conversely, Ethereum emerged as the biggest loser, suffering an even greater outflow of capital. However, the situation changed after reports that companies controlled by the Trump family began aggressively purchasing Ethereum on Sunday afternoon and continued their buying spree throughout the day.

The situation is unprecedented and could carry many unforeseen consequences for the cryptocurrency market, not necessarily positive ones. Following the Trump family's lead, many popular figures might come up with similar ideas and start offering their own personal memecoins. Additionally, publicly encouraging purchases on their social media platforms, as Trump and Melania have done, could lead to significant capital dilution and a shift of funds away from utility projects back toward memecoins.

Investor confidence was ultimately shattered by an announcement from Melania Trump, Donald Trump’s wife, about the launch of another memecoin, Melania Meme, on Sunday evening. The market saw another round of sharp declines. This time, many investors viewed the Trump family’s actions as an abuse of their influence.