40 million coins were unlocked, and it was rumored that Trump would hold a dinner for coin holders. The craze for political meme coins in the cryptocurrency circle in 2025 reached its peak with the sharp rise and fall of Trump coin (TRUMP).
Since Trump personally announced the issuance of the coin in January 2025, the TRUMP coin has soared from an opening price of $0.18 to $75, with a market value exceeding $80 billion, and then plummeted to around $8. The 30-day volatility has long been maintained at more than 100%. This roller coaster market makes spot players shudder, but it provides an excellent battlefield for option players - high volatility is both a risk and a source of excess returns.
1. The fundamentals of Trumpcoin: the triple game of politics, bubbles and regulation
1. The “double-edged sword” of political empowerment
The core value of TRUMP coin is completely dependent on Trump's political influence. In January 2025, Trump's team converted 600,000 voters into coin holding addresses through operations such as "NFT airdrop binding" and "campaign donation channel". However, this kind of "political promotion" also lays hidden dangers:
Policy black swans occur frequently: In March 2025, the SEC sued the TRUMP team for suspected "fraudulent issuance", causing the currency price to plummet 58% in a single day; and a short video by Trump on Truth Social insulting the SEC caused the currency price to return to its previous high in three hours.
High concentration of chips: 80% of the tokens are held by Trump-related companies, which will be gradually released according to a three-year unlocking plan. The market faces long-term selling risks. On-chain data shows that the top five addresses have cashed out more than $300 million in total in Q1 2025.
2. Liquidity trap and market manipulation
Although TRUMP coins have been listed on mainstream platforms such as Binance and Coinbase, the trading depth is extremely uneven:
Whales’ control of the market has become normalized: Whales often pull the market at 3 a.m. Eastern Time, triggering retail investors to follow suit and then sell back. During the Democratic National Convention in February 2025, a certain address made a net profit of $17 million in three days by “pulling and dumping the market”.
DEX liquidity crisis: 80% of the trading volume on Uniswap is concentrated in the TRUMP/ETH trading pair, with slippage often exceeding 5%, and retail investors are easily harvested by robots.
3. The sword of supervision hangs high
Global regulators have targeted political meme coins:
The U.S. SEC's March 2025 indictment explicitly accused TRUMP Coin of being an "unregistered security," and if it loses the case, it may lead to the risk of zeroing out;
The Bank for International Settlements (BIS) warned that political coins could cause "systemic financial risks", and the European Union and other places have banned local exchanges from listing TRUMP.
2. Option strategy: turning high volatility into an ATM
Faced with the annualized volatility of TRUMP coin of 287% (Bitcoin is only 70%), options are the core weapon of professional players. The following are three types of practical strategies:
Strategy 1: Insurance hedging - use put options to lock in downside risk . Applicable scenarios: holding spot but worried about black swan events (such as Trump’s health crisis or policy collapse).
• Operation method: Buy spot and buy out-of-the-money put options.
• Key parameters: The premium ratio is recommended to be controlled at 5%-10%, and the exercise price should be selected at the support level (such as the 30-day moving average).
Strategy 2: Fat-tail arbitrage - sniping deep out-of-the-money options after a sharp drop • Applicable scenarios: Among the 8 single-day plunges of more than 20% in TRUMP coin in Q1 2025, 6 of them rebounded by more than 15% within 12 hours.
• How to operate: When the currency price plummets by 20% in 10 minutes, immediately buy a deeply out-of-the-money call option expiring in the next week (e.g. buy a $10 call option when the current price is $8).
• Risk management: It is necessary to use on-chain monitoring tools (such as Nansen) to ensure that whales do not ship on a large scale.
Strategy 3: Volatility Harvesting - Short Implied Volatility (IV)
• Applicable scenarios: The implied volatility of TRUMP coin options sometimes soars between 200%-300%, which is more than 50% higher than the actual volatility.
• Operation method: When IV-rv breaks through 50%, sell out-of-the-money options expiring in two weeks, and hedge the Delta risk with spot.
• Risk management: Be alert to events such as “Trump tweeting in the early morning” that may cause IV to soar again, and be sure to set a stop loss line.
3. Risk Management: Three Iron Rules for Surviving Madness
1. Liquidity is the lifeline
Only trade option contracts on highly liquid platforms and stay away from "zombie options" with low trading volume. If you cannot close a profitable position, it will be more worrying than a loss.
2. Time is a killer
Pay attention to the passage of time value, and only buy short-term options 4 hours before clear events such as election debates and congressional hearings, and hold positions within 90 minutes. Emotional trading of meme coins is not suitable for long-term holding.
3. The wisdom of survival in dancing with the village
On-chain monitoring uses Arkham to track the movements of the top 50 addresses. When whales transfer coins to exchanges, they immediately reduce their positions. Sentiment indicators When the Alternative.me Fear and Greed Index is lower than 20, and the number of mentions of the Twitter keyword "#BuyTrump" drops by 80%, exit decisively.
In short, bubbles will eventually burst, but volatility will always exist. The final outcome of TRUMP coin is likely to be a mess - no matter whether Trump's public approval rating rises or falls, meme coins that lack practical application scenarios will eventually be abandoned. But for option players, what is important is not the rise and fall of the coin price, but whether the volatility is fat enough. As the legendary Wall Street trader said: "Volatility is the only quantifiable risk and the only asset worth paying for." On the TRUMP coin gambling table, using options to build a combination of "profiting both ups and downs" is the ultimate answer to crossing the bull and bear markets.
