US President Donald Trump has been criticized for launching a meme coin, saying he “doesn’t know much about” cryptocurrencies.
The digital coin, called TRUMP, appeared on his social media accounts ahead of Monday’s inauguration and quickly became one of the most valuable crypto coins. The value of 1 coin soared to $75 within a day, but has since fallen to $39.
However, the launch of so-called meme coins (virtual currencies with no use other than entertainment or speculation) has been widely criticized by industry insiders.
“Mr. Trump’s comment that he doesn’t know much about coins confirms my opinion that he is making a mockery of the industry. This is a stunt,” said Coin Corner CEO Danny Scott. he says.
The recent drop in value comes after President Trump told reporters, “I don’t know much about it, other than that I launched it, other than that it was very successful.” Ta.
When told that his coin had raised billions for him, he said, pointing to the tech billionaires gathered at a press conference on AI, “Billions, that’s peanuts to these guys.” I downplayed it.
Meme coins are often used by speculators to make money or to allow fans to express their support for a celebrity or internet culture moment.
This is not the first time President Trump has sold crypto products. He made millions of dollars in 2022 by launching a series of NFTs in various superhero poses.
Some industry analysts say the president’s own meme coin is a sign that other companies should follow suit.
“The TRUMP token signals to all businesses, municipalities, universities and private brands that cryptocurrencies can now be used as a capital formation and customer bootstrapping mechanism,” said Jeff Dorman of investment firm Arca. posted online.
However, the overall sentiment appears to be negative towards the presidential meme coin.
Many in the crypto industry are waiting for Trump to back up his campaign promise to revitalize the industry in the United States. People like Danny Scott are hoping to see a focused plan coming out of the administration, especially around Bitcoin.
Last year, Trump promised Bitcoin fans that he would make the United States the “crypto capital of the planet.” Several days into his term, the president has not issued any executive orders regarding virtual currencies, nor has he mentioned virtual currencies in his speeches.
According to the website CoinMarketCap, the TRUMP coin is currently the 25th most valuable cryptocurrency with a value of around $8 billion.
Since Trump and the team behind him own 80% of the coin, they could theoretically make billions of dollars by selling their shares without changing the price.
This setup is described by K33 crypto researchers as outdated for similar tokens.
“There’s no sugarcoating this, these tokenomics are scary for meme coins,” said K33 analyst David Zimmerman.
However, K33 analysts acknowledge that investors are partially protected from price shocks as the remaining 80% of the coin cannot be dumped on the open market.
There are thousands of cryptocurrency coins and anyone can create them.
First lady Melania Trump launched her own meme coin on the eve of the inauguration, and its value has since fallen from $13 to $2.70 per coin, now valued at $700 million.
However, many of the meme coins have caused significant losses to those who invest in them.
Dan Hughes of crypto firm Radix believes that the president and his wife issuing meme coins undermines the positive aspects of the industry.
“This pattern of token launches by public figures, especially politicians, may indicate a worrying trend in crypto markets where influence and liquidity manipulation can overshadow fundamental value creation.” he said.
Others in the crypto industry believe that issuing meme coins to make money is degrading.
“The introduction of these coins at the presidential inauguration raises concerns about potential conflicts of interest and could undermine the dignity of the president and first lady,” said Grzegorz Droz, a market analyst at investment firm Konotoxia. Ta.
