Some people believe these coins symbolize Trump's commitment to cryptocurrency, but many insiders in the crypto space express disdain for this.
Source: TIME
Translation and compilation: BitpushNews
When Donald Trump won the presidential election in November, many cryptocurrency enthusiasts cheered, as he promised to prioritize deregulation and legalize crypto businesses.
In the days leading up to his inauguration, heavyweight figures from the industry gathered in Washington for a "crypto ball," celebrating their status as new members of the Washington elite.
However, during the event, one of Trump's actions shocked nearly everyone: he announced a new token called TRUMP, a "meme coin" widely regarded as having no intrinsic value, with its price entirely dependent on market buying and selling.
Trump's supporters and some opportunistic day traders created billions of dollars in sales through trading this coin, driven by loyalty, hype, and the opportunity for quick profits. All this trading allowed the coin's founders—an affiliate of the Trump Organization—to realize billions of dollars in paper gains. The day after the coin's launch, Melania Trump announced her own meme coin, which also experienced wild price fluctuations. By Wednesday, TRUMP had become the 25th largest cryptocurrency by market capitalization globally, with a price of about $43, down from a previous high of $75, according to CoinMarketCap.
Trump's meme coin brought significant attention to the cryptocurrency industry and attracted many newcomers to the field.
For some, these coins symbolize Trump's commitment to cryptocurrency and his willingness to advance the industry. But many insiders in the crypto space express disdain, viewing these coins as mere money-grabbing schemes and a means for Trump to profit directly from his supporters. Trump's team controls at least 80% of the coin's supply, giving them significant influence over its price. While they are temporarily prohibited from selling these holdings, once they start to offload, it could lead to a market crash, causing ordinary users to suffer heavy losses.
Insiders in the cryptocurrency industry worry that these coins could further erode public trust in an industry already rife with scams and malicious behavior.
"The crypto industry has empowered an individual, and his first action is to highlight and exploit the money-making opportunities in this space," said cryptocurrency researcher and writer Angela Walch. "It's simply embarrassing."
Trump downplayed his role in launching the coin, stating at a press conference on January 21, "I know almost nothing about this coin other than that I launched it." The Trump Organization did not immediately respond to requests for comment. The White House press officer also declined to comment.
However, elected officials and legal experts have raised ethical and geopolitical concerns. They argue that these tokens could become tools for bribery and conflicts of interest. "These tokens provide Trump with a way to gain economic benefits from foreign adversaries and could allow him to place personal interests above the collective interests of the American people," said lawyer Puja Ohlhaver from Harvard's Democratic Innovation Lab.
What are meme coins?
TRUMP and MELANIA are both meme coins. This type of cryptocurrency is essentially "created out of thin air" by entrepreneurs writing blockchain code. Their value entirely depends on people's belief in them and their willingness to buy. To spark market enthusiasm, the teams behind these coins often leverage popular memes on social media for marketing. The underlying logic is that if memes on social media can drive cultural, creative, or even ideological developments, why can't they also become financially valuable?
Dogecoin and Shiba Inu are two typical examples, especially Dogecoin, as Elon Musk's tweets have repeatedly caused its price to soar. However, meme coins lack intrinsic value, making them particularly volatile and speculative. This characteristic is precisely what attracts some people: if investors buy in at the right time, they could make huge profits. Conversely, if they buy at market peaks, they could quickly lose all their funds. Additionally, meme coins have been involved in some so-called scams, where investors lost significant amounts of money.
Trump's relationship with meme culture
Trump's supporters often use memes as a marketing tool. During his presidential campaign, a content creation team frequently posted pro-Trump meme content on social media. Last summer, some unofficial Trump meme coins, such as Pepe (TRUMP) and Maga People Token (PEOPLE), also experienced price fluctuations, with some investors even viewing them as symbols of Trump's chances of winning.
Trump has also made money through cryptocurrency. He began selling NFT trading cards in 2022 and reportedly earned millions according to financial disclosure documents. In September 2023, he launched the yet-to-be-launched cryptocurrency platform World Liberty Financial. By 2025, meme coins may have become the fastest way for emerging crypto entrepreneurs to make money.
The trading frenzy of TRUMP
On January 18, two days before the inauguration, Trump launched his token through the Trump Organization's affiliate CIC Digital LLC. This move surprised the entire industry. At the time, the "crypto ball" was underway, with guests including Snoop Dogg and House Speaker Mike Johnson. Cryptocurrency entrepreneur Nick O’Neill released a video at the event stating that almost no one knew about the token's existence.
The next day, the market began trading the token frantically, triggering a chain reaction. The blockchain platform Solana and cryptocurrency exchange Coinbase, which supported the token, experienced trading delays lasting several hours. Coinbase CEO Brian Armstrong tweeted, "We did not anticipate such a surge in trading."
Within just one day, the team controlling the token (led by CIC Digital) saw the token's value reach about $51 billion on paper. However, this figure was unrealistic, as attempting to convert the tokens to dollars would cause their price to plummet rapidly. Later that same day, Melania Trump launched her own meme coin, MELANIA, effectively cutting TRUMP's market value by billions of dollars, as traders seemed to sell TRUMP to buy the new coin. Within an hour of MELANIA's launch, TRUMP's price dropped from over $70 to about $45. A fake coin unrelated to Trump’s son, BARRON, also briefly reached a market value of $460 million before plummeting by 95%.
The industry's "soul-searching"
Some of Trump's cryptocurrency supporters accuse him of exploiting meme coins for predatory behavior. Cryptocurrency advocates decentralization, while the president's team controls at least 80% of the TRUMP supply. Another blockchain analytics firm, Bubblemaps, found that 89% of the MELANIA token supply is concentrated in a single crypto wallet. Coinbase executive Conor Gregor wrote on Saturday that Trump's team earned $58 million just from trading fees.
"Trump's credibility is completely destroyed," wrote investment manager Michael A. Gayed. Trump's former White House communications director and cryptocurrency advocate Anthony Scaramucci stated, "No one thinks this behavior is beneficial to society."
Angela Walch summarized, "The entire industry is now undergoing profound reflection. We have gained power, but does this align 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. (The controlling company is an affiliate of Trump's business, which stated that the Trump token "is not an investment or security, but a form of 'support expression'.") Critics argue that the president's unexpected windfall from cryptocurrency gives him no incentive to crack down on the industry, which could lead to his tokens losing billions in value. California Democratic Congressman Ro Khanna, one of Congress's most prominent cryptocurrency supporters, wrote on X, "The law must prohibit elected officials from holding meme coins."
Some critics worry that these tokens pose a national security threat, as they allow foreign agents to purchase large amounts of tokens as leverage against Trump's policy decisions. These agents might buy tokens to win Trump's support—or threaten to sell them, which could lead to a price crash. Ohlhaver from Allen Lab stated that they could also use encryption technology to conceal their identities from everyone in the world, except Trump.
The Founding Fathers attempted to prevent such conflicts of interest through the compensation clause in the Constitution, which prohibits the president from profiting from his position. (At the time, gift-giving was a common corrupt practice among European rulers and diplomats.) Some argue that Trump's issuance of tokens before his inauguration means he was acting as an ordinary citizen. Cryptocurrency journalist Zack Guzmán wrote on X, "Issuing these tokens before Trump officially became president is not that complicated for them. If not, it would be much easier to claim that Trump profited from his presidency and violated the compensation clause."
But Ohlhaver believes that as long as Trump holds token shares, significant conflicts of interest will exist. "He still owns the tokens, and if foreign adversaries hype them up, their prices will appreciate," she said.
Ohlhaver also stated that Trump's meme coins fundamentally threaten the public's understanding of money. "With the rise of social media and global social networks, it has become very easy to leverage your status and influence to create a new form of currency and legitimize it," she said. "For us, it is important to maintain our national public goods and ensure they serve our common interests, rather than the narrow interests of the elite, who will gain enormous benefits at the expense of everyone else."
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