‘A joke’: Trump’s new meme-coin sparks anger in crypto world
US President Donald Trump has been criticized for launching the meme-coin, saying he “doesn’t know much” about cryptocurrencies.
The digital coin called TRUMP appeared on his social media accounts ahead of his inauguration on Monday and quickly became one of the most valuable crypto coins. The value of one coin rose to $75 within a day, but has since fallen to $39.
But the launch of the so-called meme-coin – a cryptocurrency that has no utility other than fun or speculation – has been widely criticized by industry insiders.
Danny Scott, CEO of CoinCorner, says, “Trump’s comments about not knowing much about coins support my opinion that he is making fun of the industry. This is a stunt.”
The latest drop in value came after Trump told reporters: “I don’t know much about it other than I launched it, except that it was very successful.”
When told that his coin had raised several billion dollars for him, he said, pointing to the tech billionaires gathered for a press conference about AI, “Several billion – it’s peanuts to these guys”. .
This is not the first time Trump has sold crypto products. He made millions in 2022 by launching a series of NFTs in different superhero poses.
Some industry analysts say the president having his own meme coin is a signal that others should adopt as a way to make money from supporters.
“The Trump token signals to every company, municipality, university, and personal brand that crypto can now be used as a capital formation and customer bootstrapping mechanism,” Jeff Dorman of investment firm Arca posted online.
However, overall sentiment toward the presidential meme coin appears to be negative.
Many in the crypto world are waiting for Trump to support his campaign promises to help boost the industry in the US. People like Danny Scott hope to see plans from the administration centered specifically around Bitcoin.
Last year Trump promised Bitcoin fans that he would make the US the “crypto capital of the planet.” A few days into his term, the President has not issued any executive orders related to cryptocurrency, nor has he mentioned it in his speeches.
According to the website CoinMarketCap, TRUMP coin is now the 25th most valuable crypto coin, worth about $8 billion.
Trump and the team behind it own 80% of the coins, so in theory, they would make billions of dollars if they sold their shares and the price remained the same.
This set-up has been described as outdated for similar tokens by crypto researchers at K33.
K33 analyst David Zimmerman said, “There’s no sugar-coating this – these tokenomics are terrible for a meme-coin.”
However, K33 analysts admit that the remaining 80% of coins cannot be floated on the open market, so investors are partially protected from price shocks.
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, the value of which is now worth $700 million after falling from $13 per coin to $2.70.
Meme-coins are often launched for entertainment and used by speculators to make money or to allow fans to show support for a celebrity or moment in Internet culture.
But many people who invested in these have suffered huge losses.
Dan Hughes of crypto firm Radix believes that the president and his wife launching their own meme-coins undermines the positivity of the industry.
“This pattern of celebrity-driven token launches, particularly by political figures, potentially signals a worrying trend in crypto markets, where influence and liquidity manipulation can impact fundamental price formation,” he said.
Others in the cryptocurrency world think that launching meme-coins to make money is outrageous.
“The introduction of these coins during a presidential inauguration raises concerns about a potential conflict of interest and could damage the dignity of the president and the first lady,” said Grzegorz Drozdz, market analyst at investment firm Konotoxia.
