Ripple and Galaxy Digital loaned $160 million to MoonPay to meet TRUMP token demand.
TRUMP token could not sustain its early momentum as its value has now dropped 79% from its peak.
Apparently, it took the heroics of top executives from Galaxy and for ’s official meme coin TRUMP to launch successfully. This is according to new revelations brought to light by a recent .
On January 18, TRUMP launched and immediately saw an overwhelming amount of trading activity. This demand led crypto exchange MoonPay to quickly seek emergency funds as the token’s market capitalization skyrocketed from around $200 million at issuance to over $10 billion. All this happened within the first 48 hours of launch.
TRUMP Token’s Saw Explosive Growth but MoonPay Faced Liquidity Crisis
The hype continued around Trump’s meme coin launch as it came just a few days before his swearing-in ceremony. Being the first time that a president anywhere will be directly linked to a digital asset, the token also quickly secured spot and futures listings on major exchanges, generating more than $20 billion in trading volume over the two days.
Meanwhile, the positive signs seen from TRUMP’s launch came with a very big challenge for MoonPay. The token’s demand peaked on Saturday, a day when MoonPay could not access its fiat accounts. Also, next Monday was Trump’s inauguration ceremony so it was a public holiday.
MoonPay now had the problem of accessing the over $100 million needed to support TRUMP’s trading activity. For operations to continue, the firm was left with no other option than to seek a short-term loan.
Crypto Execs to The Rescue
By the initial calculations of MoonPay president Keith Grossman, alongside CEO Ivan Soto-Wright and CFO Mouna Siala, all that the company needed to ensure smooth operations was around $100 million worth of USD Coin stablecoin. They contacted Galaxy’s Mike Novogratz for the loan.
Both parties reached an agreement after MoonPay showed proof of its ability to pay back.
However, the problem was far from over. Demand for the TRUMP token was still out of control. That is not to mention that the first lady Melania Trump’s MELANIA tokens also took off, adding to the pressure.
The situation meant that the initial $100 million would no longer be enough to meet liquidity requirements. This pushed MoonPay to reach out to Ripple’s CEO, Brad Garlinghouse, requesting an additional $60 million. Ripple also did its check and provided the funds, albeit under strict conditions like personal asset pledges from MoonPay’s leadership.
The following Tuesday, once it could access its fiat accounts, MoonPay repaid both loans in full.
Despite its very impressive launch, the TRUMP token has since struggled in the crypto market. Prices have fallen over 79% from their January 19 peak, a further proof of the volatility of meme coins, even when they are backed by prominent individuals like Donald Trump.