Trump’s Memecoin Risks Giving the Industry a Bad Rap. Yes or No?Wait, what happened? The 47th US President last week rolled out his official “meme,” called $TRUMP. Over the weekend, it whipped up a market cap of roughly $20 billion. That’s more than AI server maker Super Micro SMCI or clothing giant H&M HMB . Over the weekend. Now it’s fanning concerns among crypto execs that Trump’s participation could hinder growth and give the market a bad rap. Let’s talk about that.
It’s official! Donald Trump has launched a meme coin — the same ones that make lots of buzz, get tons of attention and may or may not result in froth that quickly evaporates, leaving hopeful buyers holding the bag.
Trump’s token, aptly called “Trump Meme” TRUMPUSDT is now circulating across exchanges. Billions get sloshed around, getting pulled in but then gushed out.
The meme’s valuation soared to $20 billion Sunday morning, flexing an increase of more than 1,000%, or 10X in less than a weekend’s time. Fully diluted valuation hit a staggering $75 billion.
Disbelieving users probably had to wonder whether someone hacked into Trump’s accounts both on X and on his social media platform Truth Social. But it was all legit, coming from the man himself.
“My NEW Official Trump Meme is HERE! It’s time to celebrate everything we stand for: WINNING! Join my very special Trump Community. GET YOUR $TRUMP NOW,” the post said . Oddly, there were some highly specific (and frankly sketchy) bits of text in the Terms and Conditions listed on the token’s website.
The Trump tokens are not an investment, not an investment contract, not a security, and have “nothing to do with any political campaign or any political office or governmental agency.” Still, the Trump Organization is entitled to get revenue “derived from the trading activities” of these memes.
The surprise launch appealed to retail traders who went on a dizzying buying adventure, hoping to ride out the gain train and get a piece of the gift that seemingly kept on giving. Since that $75-per-coin peak, valuation has come down by roughly 50%.
It must be said that 80% of what you see going up is held by Trump and his companies CIC Digital, and a CIC co-owned entity called Fight Fight Fight LLC. (That’s what Trump shouted after he was grazed by a bullet at a rally in July.)
Also, if you decide to participate and you end up holding the bag, the terms and conditions say you won’t be allowed to sue or participate in a class-action lawsuit against the company and indemnify the project against any claims.
Apparently, the meme coin list got a new contender and Dogecoin’s top spot might be challenged.
So much so that some crypto executives have started to frown upon Trump’s crypto participation, who obviously became an overnight crypto billionaire with this controversial launch. The most obvious transgression is the conflict of interest — the man empowered to narrate how markets are valued and regulated (including setting crypto policy) benefits directly from the sale of his own investment product.
A reporter asked Trump to comment on his new endeavor earlier this week.
“Well I don’t know if it benefited. I don’t know where it is. I don’t know much about it other than I launched it,” he said. “I heard it was very successful. I haven’t checked it. Where is it today?”
Trump’s token was overshadowed by his wife’s meme coin. Called Melania MELANIAUSDT , the token also made its way to the top-traded coins but quickly lost momentum and the gains faded.
The launch of the first lady’s token prompted Ryan Selkis, a Trump supporter and ex-CEO of prominent crypto research firm Messari, to chime in, saying whoever advised Trump to go ahead with the projects should be fired.
“1. They don’t know what they’re doing. 2. They cost you a lot of $ and goodwill. 3. They don’t have your interests in mind,” said Selkis in a post on X.
To many, especially the staid supporters of organic growth based on use cases and real-world applications, Trump’s foray into crypto through a meme is a speculative move that gives the industry a bad rap.
“I think people will think meme coins are the foundation of the crypto industry,” said billionaire entrepreneur and crypto investor Mark Cuban. “It’s not. There are real applications that add value.” Cuban added that this launch looks like “a highly manipulated offering.”
The criticism continued to trickle in. “There’s a general level of disgust,” said Michael Gayed, a market analyst. “I do believe this puts into question some of Trump’s credibility when we have a president-elect enrich himself just before inauguration and make a mockery of an entire ecosystem.”
There’s also the other end of the spectrum. A Detroit pastor named Lorenzo Sewell (who gave a speech during Trump’s inauguration) followed in the President’s footsteps and launched his own meme coin.
“I need you to do me a favour and go and get that coin in order for us to accomplish the vision that God has called us to do on earth,” he said in a video online. His token has washed out more than 93% of its value since its trading debut.
What do you think? Is Trump’s crypto participation contributing to more market froth and only fueling the speculative aspect of trading? Or is there a deeper meaning behind? Comment with your thoughts below!
