US President Donald Trump has been criticised for launching a meme-coin while saying he “doesn’t know much” about the cryptocurrency.
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 a single coin shot up to $75 within a day, but since has fallen to $39.
But the launch of the so-called meme-coin – a cryptocurrency with no utility other than for fun or speculation – has been widely criticised by industry insiders.
“Trump’s comments about not knowing much about the coin back up my opinion that he is making a mockery of the industry. It’s a stunt,” says Danny Scott, CEO of CoinCorner.
The latest dip in value came after Trump told reporters: “I don’t know much about it other than I launched it, other than it was very successful.”
When he was told his coin raised several billion dollars for him, he played it down saying “several billion – that’s peanuts for these guys” pointing to tech billionaires assembled for a press conference about AI.
It’s not the first time Trump has sold crypto products. He made millions from launching a series of NFTs of him in various superhero poses in 2022.
Some industry analysts say the president having his own meme coin is a sign that others should follow.
“TRUMP token just signaled to every company, municipality, university & individual brand that crypto can now be used as a capital formation and customer bootstrapping mechanism,” Jeff Dorman from investing firm Arca posted online.
However, the overall sentiment seems to be negative towards the president’s meme coin.
Many in the crypto world are waiting for Trump to back up campaign promises to help boost the industry in the US. People like Danny Scott hope to see focused plans, particularly around Bitcoin, from the administration.
Last year Trump promised Bitcoin fans he would make the US the “crypto capital of the planet”. A few days into his term, the president has not issued executive orders involving cryptocurrency, nor has he mentioned it in his speeches.
TRUMP coin is now the 25th most valuable crypto coin with a value of around $8 billion, according to the website CoinMarketCap.
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This set-up has been described by crypto researchers at K33 as outdated for similar tokens.
“There’s no sugar-coating this – these tokenomics are horrendous for a meme-coin,” said David Zimmerman, a K33 analyst.
However, K33 analysts acknowledge that the remaining 80% of coins can’t be dumped on the open market so investors are partially shielded from price shocks.
There are thousands of cryptocurrency coins and anyone can create one.
First Lady Melania Trump launched her own meme-coin on the eve of the inauguration, which now has a value of $700m since slumping from $13 a coin to $2.70.
Meme-coins are often launched for fun and used by speculators to make money or to allow fans to show support to a celebrity or moment in internet culture.
But many have led to big losses for people investing in them.
Dan Hughes, from crypto firm Radix, thinks the president and his wife launching their meme-coins undermines the positives of the industry.
“This pattern of celebrity-driven token launches, particularly from political figures, potentially marks a concerning trend in crypto markets where influence and liquidity manipulation could overshadow fundamental value creation,” he said.
Others in the cryptocurrency world think that launching meme-coins to make money is degrading.
“The introduction of these coins during the presidential inauguration raises concerns about potential conflicts of interest and may undermine the dignity of the president and the first lady,” said Grzegorz Drozdz, market analyst at investment firm Conotoxia.
#Trumps #memecoin #sparks #anger #crypto #world
