Original source: TIME Collation and compilation: BitpushNews
When Donald Trump won the presidential election in November, many cryptocurrency enthusiasts cheered because he promised to prioritize deregulation and legalize crypto businesses.
A few days before he was sworn in, heavyweights in the industry gathered in Washington for a "crypto ball" to celebrate their status as new members of Washington's authority circle.
However, during the event, Trump shocked almost everyone with a move. He announced a new token called TRUMP, a "meme coin" that is widely believed to have no intrinsic value and its price depends entirely on buying and selling behavior in the market.
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Trump supporters and some opportunistic day traders generated billions of dollars in sales through trading in the coin, driven by loyalty, hype and the opportunity to make quick profits. All these transactions allowed the founders of the coin, an affiliate of the Trump Organization, to realize billions of dollars in gains on paper. The day after the coin was launched, Melania Trump announced her own meme coin, which also experienced a crazy rise and fall in price. By Wednesday, TRUMP was the world's 25th-largest cryptocurrency by market value, trading at about $43, according to CoinMarketCap, well below its previous high of $75.
Trump's meme coin has brought a lot of attention to the cryptocurrency industry and attracted many newcomers to the field.
For some, the coins symbolize Trump's commitment to cryptocurrency and his willingness to promote the industry. But more people in the cryptocurrency community are disgusted by this, believing that these coins are nothing more than a money-making operation and a means for Trump to profit directly from his supporters. Trump's team controls at least 80% of the coin supply, which gives them a huge influence on the price of the coin. Although they are temporarily prohibited from selling these holdings, once they start selling, it will cause the market to crash and cause heavy losses to ordinary users.
Crypto industry insiders worry that the coins could further sow public doubts about an industry already rife with scams and malicious behavior.
“It’s just embarrassing that the crypto industry put a person in power and his first act was to highlight and exploit the money-making opportunities in the space,” said Angela Walch, a cryptocurrency researcher and author.
Trump has downplayed his role in launching the coin, saying at a press conference on Jan. 21: “I know almost nothing about it other than I launched it.” The Trump Organization did not immediately respond to a request for comment. A White House press officer also declined to comment.
Elected officials and legal experts, however, have raised ethical and geopolitical concerns. They say the tokens could be a vehicle for bribery and conflicts of interest. "These tokens provide Trump with a way to financially benefit from foreign adversaries and could allow him to put his personal interests above the collective interests of the American people," said Puja Ohlhaver, an attorney at Harvard University's Democracy Innovation Lab.
What are memecoins?
TRUMP and MELANIA are both memecoins. These cryptocurrencies are essentially "created out of thin air" by entrepreneurs writing blockchain code. Their value depends entirely on people's belief in them and willingness to buy them. To stimulate market enthusiasm, the teams behind these coins often use popular memes on social media for marketing. The logic behind this is that if memes on social media can drive the development of culture, creativity, and even ideology, then why can't they also become valuable financially?
Dogecoin and Shiba Inu are two typical examples, especially Dogecoin, as Elon Musk's tweets have caused its price to surge on several occasions. However, memecoins lack intrinsic value, which makes them particularly volatile and speculative. This feature is precisely what makes them attractive to some people: if investors buy at the right time, they may make huge profits. On the other hand, if they buy at the market high, they may quickly lose all their money. In addition, memecoins have been used in some so-called scams in which investors lost a lot of money.
Trump's relationship with meme culture
Trump's supporters often use memes as a marketing tool. During his presidential campaign, a team of content creators once posted a large number of pro-Trump memes on social media. Last summer, some unofficial Trump meme coins, such as Pepe (TRUMP) and Maga People Token (PEOPLE), also experienced price ups and downs, and some investors even viewed them as symbols of Trump's chances of winning.
Trump has also made money from cryptocurrencies. He began selling NFT trading cards in 2022 and made millions of dollars according to financial disclosure documents. In September 2023, he launched the cryptocurrency platform World Liberty Financial, which has not yet been launched. By 2025, meme coins may have become the fastest way for emerging crypto entrepreneurs to make money.
TRUMP'S TRADING Frenzy
On January 18, two days before the inauguration, Trump launched his token through CIC Digital LLC, an affiliate of the Trump Organization. The move caught the entire industry by surprise. The event was in the middle of a "crypto-ball" that also featured guests like Snoop Dogg and House Speaker Mike Johnson. Crypto entrepreneur Nick O'Neill posted a video at the event saying that almost no one at the scene knew the token existed.
The next day, the market began to trade the token frantically, setting off a chain reaction. Both Solana, the blockchain platform that supports the token, and Coinbase, a cryptocurrency exchange, experienced hours-long trading delays. "We did not expect this surge in trading," Coinbase CEO Brian Armstrong wrote on Twitter.
In just one day, the team controlling the token (led by CIC Digital) had about $51 billion worth of tokens on their books. However, this figure is unrealistic because if they tried to exchange the tokens for dollars, their price would fall rapidly. Later that same day, Melania Trump launched her own meme coin, MELANIA, which effectively slashed billions of dollars from TRUMP’s market value as traders appeared to sell TRUMP to buy the new coin. Within an hour of MELANIA’s launch, TRUMP’s price fell from over $70 to about $45. A fake coin, BARRON, that has nothing to do with Trump’s son, also had a market value of $460 million at one point, but then plummeted 95%.
Industry’s “Soul-searching”
Some of Trump’s cryptocurrency supporters accused him of using meme coins for predatory behavior. Cryptocurrency advocates decentralization, but the president’s team controls at least 80% of TRUMP’s supply. Bubblemaps, another blockchain analysis company, found that 89% of the MELANIA token supply is concentrated in a single crypto wallet. Conor Gregor, a Coinbase executive, wrote on Saturday that the Trump team had earned $58 million in trading fees alone.
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“Trump’s credibility has been completely destroyed,” wrote investment manager Michael A. Gayed. Anthony Scaramucci, Trump’s former White House communications director and cryptocurrency advocate, said: “No one thinks this behavior is good for society.” Angela Walch concluded: “The entire industry is now undergoing a deep reflection. We have been given power, but is it consistent with our original goals?” Concerns about ethics and national security Critics outside the cryptocurrency industry have also raised ethical concerns. Trump is now directly involved in the industry he is responsible for regulating. (Control Corporation, an affiliate of Trump’s business, wrote that the Trump Token “is not an investment or security, but an ‘expression of support.’ ”) Critics believe that the president’s cryptocurrency windfall has given him no incentive to crack down on the industry, which could cause the value of his tokens to fall by billions of dollars. “Elected officials must be prohibited by law from holding memecoins,” Rep. Ro Khanna, D-Calif., one of Congress’s most prominent cryptocurrency supporters, wrote on X.
Some critics worry that the tokens pose a threat to national security because they allow foreign agents to buy large quantities of them as leverage over Trump’s policy decisions. Those agents could buy the tokens to win Trump’s favor — or threaten to sell them, which could cause the token’s price to plummet. They could also use encryption to hide their identities from everyone in the world, except Trump, said Ohlhaver of the Allen Lab.
The Founding Fathers sought to prevent such conflicts of interest with the emoluments clause in the Constitution, which prohibits the president from using the power of his office to enrich himself. (At the time, gift-giving was a common form of corruption among European rulers and diplomats.) Some have argued that Trump’s issuance of the tokens before he was sworn in means he is acting as a private citizen. “It was less complicated for them to issue these tokens before Trump officially became president,” crypto journalist Zack Guzmán wrote on X. “If it wasn’t, it would be much easier to claim that Trump profited from his presidency and violated the emoluments clause.”
But Ohlhaver argues that as long as Trump owns a share of the tokens, there is a major conflict of interest. “He still owns the tokens, and if foreign adversaries hype them up, the price of these tokens will appreciate,” she said.
Ohlhaver also said Trump’s meme coin fundamentally threatens the public’s understanding of money. “With the rise of social media and global social networks, it has become very easy to use your position and influence to create and legitimize a new form of currency,” she said. “It’s important for us to safeguard our national public goods and ensure that they serve our common interests rather than the narrow interests of an elite class that will reap huge benefits at the expense of everyone else.”