Crypto Thought Trump Would Bring It Legitimacy. Then He Launched a Meme Coin.
Industry players worry the success of the president’s meme coin will undermine the credibility they have worked hard to cultivate
The crypto industry eagerly awaited Donald Trump’s return to the White House. Now, it’s reeling after the president and first lady launched a pair of meme coins.
Dubbed $TRUMP and $MELANIA, the tokens have no economic purpose—their value is largely based on the popularity of internet memes. The market cap of the president’s coin has soared to $8.4 billion since Friday night’s launch, while the first lady’s token is worth about $800 million, according to CoinMarketCap.
By selling coins known for their speculative nature and extreme volatility, the president has undermined the credibility that the industry has worked hard to build in recent years, some crypto executives and investors say.
They also point to the brazen conflict of interest: Trump benefits directly from the sale of the tokens while setting the policy that affects how markets are valued and regulated.
Even the most ardent Trump supporters reached a breaking point when the $MELANIA token launched less than 48 hours after the rollout of her husband’s coin.
Ryan Selkis, the former chief executive of crypto research firm Messari and a vocal supporter of Trump, urged the president to fire the adviser who recommended going forward with the launch of the second coin.
“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 social-media post shortly after the $MELANIA token launch.
The $TRUMP token lost almost half its value after first lady Melania Trump’s coin was unveiled. Traders say demand for the tokens overlapped—$TRUMP token holders had to unload some of their holdings to buy her meme coin. Prices have since regained some ground, but the market value of the $TRUMP coin peaked Sunday at almost $15 billion.
Some crypto enthusiasts questioned if the coins were a scam and if Trump’s social-media accounts where they were promoted had been hacked. The mechanisms of the tokens reminded some of a rug pull, crypto parlance for a project that is launched and quickly abandoned, leaving investors with steep losses.
One point of criticism: 80% of the $TRUMP token’s supply is owned by Fight Fight Fight and CIC Digital, an affiliate of the Trump Organization, according to the website associated with the token. The terms and conditions of both $TRUMP and $MELANIA bar buyers from joining class-action lawsuits against the project and indemnify the project against any claims.
Trump or any other coin issuer benefits twice when meme coins are sold to the public. They get the proceeds of coin sales and they have an ownership stake whose value rises when the price of the coin increases. They can then sell more coins to gain further profits.
Spokespeople for the Trump Organization and the websites associated with the tokens didn’t respond to requests for comment.
After the stunning collapse of the FTX exchange in 2022, the crypto industry made big inroads in rebuilding its brand and reputation. It emerged as one of the biggest spenders of the election cycle by donating $170 million to a trio of super PACs to elect friendly lawmakers.
Bitcoin went mainstream and soared past $100,000 thanks to the roaring launch of the first U.S. spot bitcoin exchange-traded funds offered by big Wall Street asset managers such as BlackRock and Fidelity Investments. Trump became the industry’s biggest cheerleader and promised to deliver legislation that would treat digital assets differently than stocks and bonds.
The tokens aren’t the Trump family’s first foray into crypto. Last year the president helped launch a decentralized finance project with his sons Donald Trump Jr. and Eric Trump known as World Liberty Financial.
Yet the decision to launch the cryptocurrencies caught the crypto community off guard. A crowd of crypto executives and Silicon Valley tycoons who gathered Friday night at an event dubbed the Crypto Ball didn’t learn of the launch until they checked their phones late in the evening. Trump unveiled the coin on social media at 9 p.m. ET.
In launching the tokens, Trump has waded into a longstanding divide in the world of crypto: staid technology enthusiasts who see crypto as a means of financial inclusion and innovation versus speculative investors who see it as a means to monetize brands, memes and ideas.
“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, who was vocal in his support of Kamala Harris during the presidential election, said Trump’s token launch looks like “a highly manipulated offering.”
The backlash over the Trump meme coins reached beyond the crypto industry. Michael Gayed, a portfolio manager and market analyst who publishes the Lead-Lag Report, posted criticism of the coin on X that drew support within the crypto community.
“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, who was vocal in his support of Kamala Harris during the presidential election, said Trump’s token launch looks like “a highly manipulated offering.”
The backlash over the Trump meme coins reached beyond the crypto industry. Michael Gayed, a portfolio manager and market analyst who publishes the Lead-Lag Report, posted criticism of the coin on X that drew support within the crypto community.