Small-Cap Stock to Buy for Upside on Trump Memecoin Crypto Craze
As Donald Trump's inauguration fueled a $28 billion surge on the Solana blockchain, here's a stock play for those looking to jump in.
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Social media exploded around Donald Trump this past weekend. I’m not talking about the person or even the inauguration. Nope. Launched on the Solana blockchain, the Trump-endorsed TRUMP memecoin had everyone talking and trading.
I saw tweets from currency and commodity gurus discussing what traders needed to know about the Trump coin. CNBC anchor, Brian Sullivan, tweeted this on Sunday afternoon:
The Solana memecoin skyrocketed in price and volume after launch. From the low single digits to over $70 per coin, the first 72 hours of hectic trading propelled Solana decentralized exchange (DEX) trading activity to hit $28 billion on January 18 and $27 billion on January 19. Both were all-time highs.
Solana’s DEX also reached nearly $17 billion on January 17. The surge in volume has generated $35 million in fees this month. For comparison, the Nasdaq averages around $300 billion per day. Whether you believe in the validity of cryptocurrency and memecoins, the amount of money transacted daily is very real.
That being said, I have no desire to trade memecoins, but I’m happy to own a company that can benefit from this insanity: DeFi Technologies DEFTF. Three weeks ago, I outlined several reasons why DEFTF was my small-cap stock for 2025. You can read those here.
Today, I will add another reason: Solana and the memecoin craze.
Our approach to cryptocurrency should be like our approach to stocks: Diversification. The media won’t let you forget that, if you want a public play on Bitcoin, you buy MicroStrategy MSTR, but what about Solana? It’s a low-cost, scalable, high-transaction speed chain that has quickly become a core blockchain along with Bitcoin and Ethereum. In fact, I would argue it has moved ahead of Ethereum from an investment thesis as it processes tens of thousands of transactions per second. Google GOOGL, Stripe, Shopify SHOP and PayPay PYPL have integrated Solana as well.
I value DEFTF because it offers broad exposure to dozens of coins with a lower risk than simply owning a coin through its exchange-traded products (ETPs); however, there is an additional low-risk, high-return alpha in its business model I haven’t discussed yet: SolFi Technologies and its unique relationship with Solana.
In November 2024, DeFi management announced the company planned to spin out SolFi Technologies. Positioned as the "MicroStrategy for Solana," SolFi combines innovative treasury strategies, staking operations and ecosystem investments to generate high-yield returns and capitalize on Solana’s rapid decentralized finance space adoption and strong growth.
SolFi Technologies will acquire and stake Solana (SOL) tokens using DeFi Technologies’ validator node operations, advanced trading algorithms, and a proprietary Maximum Extractable Value (MEV) engine. The earnings will be reinvested to compound growth or distributed as dividends to shareholders. The company can further accelerate Solana acquisitions through bolt-on acquisitions and by tapping the capital markets.
SolFi should outperform traditional token holdings courtesy of its proprietary below-market coin acquisition strategy and underlying cash-flowing operational company. As shareholders and partners, DEFTF holders can gain exposure to SolFi before the spinout and own a piece of the MicroStrategy for Solana before the broader market understands the stock's true potential.
At the time of publication, Byrne is a partner in a venture equity firm that has a business development and consulting relationship with Defi Technologies, and Byrne owns shares of DEFTF for his own account.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider DEFTF to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
