Cryptocurrency industry executives have warned that a meme coin announced by President Donald Trump and his wife just days before his inauguration could damage the industry’s reputation and spark a backlash from investors.
$TRUMP was launched by the President on Friday night in the US, followed by $MELANIA on Sunday. The total nominal value of both tokens initially soared over the weekend, reaching $14.5 billion for the president and nearly $3 billion for Melania.
But since then, they have lost more than half of their value, leading to accusations of conflicts of interest and concerns that thousands of retail investors may have been sucked into trading tokens that are even more volatile than Bitcoin. leading to concerns.
“I think the president should focus on running the country, even if it’s old-fashioned,” said Nick Carter, a founding partner at crypto venture capital firm Castle Island Ventures and a Trump supporter.
“Not to mention the obvious (conflict of interest) given the fact that President Trump can dictate cryptocurrency policy,” he added.
One of Silicon Valley’s biggest investors at the World Economic Forum in Davos called Tesla CEO Elon Musk and Trump “the new Crassus and Caesar” and said they had formed an alliance to advance his interests. He was referring to Roman politicians.
“There is a real ‘end of empire’ happening in the United States,” the official added, noting that billions of dollars in wealth were created overnight. “Human nature never changes.”
According to data from CoinMarketCap, much of the trading activity for the 200 million Trump coins available is concentrated in lesser-known Asia-based exchanges such as BiKing, Gate.io, and Megabit, rather than in the United States. .
Meme coins do not have the cash flow, business model, or utility to support their valuation. Their value derives from their popularity, which is often as ephemeral as the meme they represent.
“The Trump meme is intended to serve as an expression of support and commitment to the ideals and beliefs that the symbol ‘$TRUMP’ embodies,” Coin’s website states.
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The Trumps’ coin launch comes after the president showed enthusiastic support for cryptocurrencies during his campaign. He promised a more industry-friendly system for companies after executives faced a regulatory crackdown under the Biden administration.
But many in the crypto industry fear it could further damage the reputation of an industry that is trying to rebuild trust after a series of high-profile frauds and bankruptcies.
Meanwhile, some lawmakers are concerned that retailers could face significant losses.
“This meme coin is the worst of all cryptocurrencies,” said Democratic Congresswoman Maxine Waters, a member of the House Financial Services Committee. “Trump devised a way to circumvent national security and anti-corruption laws, allowing interested parties to anonymously send money to him and his top aides.”
“His economic interests are on sale,” said Oskar Aslund, chief strategy officer at cryptocurrency hedge fund brokerage AKJ. “There are no checks and balances here.”
Gettrumpmemes.com did not respond to a request for comment.
“I think it’s hurting the industry,” Anthony Scaramucci, founder of SkyBridge Capital and former White House communications director, said during a panel discussion in Davos on Tuesday. “I think it’s going to delay some people in the regulatory process,” added Scaramucci, whose company runs a digital asset fund.
The world’s most popular meme coins are tokens that represent viral moments and characters on the internet. There is Dogecoin, which represents Shibu Inu. Pepe represents the comic green frog. And Fatcoin.
Approximately 80 percent of President Trump’s tokens are held by CIC Digital, a company affiliated with the Trump Organization, and a company jointly owned by CIC called Fight Fight Fight LLC, according to the token website. A reference to the Trump assassination attempt last summer. Both companies will also receive a portion of the trading proceeds associated with the Trump token.
Tokens held by insiders will begin to be unlocked for sale over the next 3-12 months.
Following President Trump’s lead, Detroit pastor Lorenzo Sewell, who spoke at the presidential inauguration, announced the launch of his own meme coin later that day.
“In order to fulfill the vision that God has commanded us to do on earth, please, please go and get that coin,” he said in an online video.
While President Trump’s promise of crypto-friendly regulation was warmly welcomed by the industry, executives doubt that the president’s enthusiasm for meme coins will benefit him in the long run.
“The immediate impact is taking liquidity and attention away from legitimate projects that are addressing real-world use cases that the industry needs to prove to the world in 2025,” said Yield Guild Games. said Serge Raymond Nzabandla, Corporate Development and Finance Manager. blockchain company.
“Given their zero-sum nature,[meme coins]end up harming retail investors, which is something[former Securities and Exchange Commission Chairman]Gary Gensler was trying to avoid.” That’s unfortunately ironic,” he added.
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Mr. Trump has vowed to “end the persecution” of the crypto industry and appointed crypto advocate Paul Atkins to run the regulator, making it unlikely that his own coins will come under scrutiny. Many people are thinking.
In an apparent attempt to avoid potential lawsuits, a provision on Trump Memecoin’s website states that users are free to “comply with any claim, dispute, or controversy you may have. , agree not to file, join, or participate in any class action lawsuit.
Hayley Welch, who created a meme coin called “Hawk Tuah” based on a viral internet moment, was sued late last year after investors suffered losses on her token. Last month, she said the lawsuit was ongoing and she was “fully cooperating” with her lawyers.
“There is no protection for retail investors in this,” Åslund added. “He’s above the law, and that’s obviously scary as well.”
