Cryptocurrency executives have warned that meme coins launched by President Donald Trump and his wife days before his inauguration are damaging the industry's reputation and risk investor backlash.
$Trump It was launched by the president on Friday evening in the United States and was followed on Sunday by $MELANIA. The total nominal value of both symbols initially rose over the weekend, with the President's value reaching $14.5 billion, while Melania's value reached nearly $3 billion.
But it has since lost more than half its value, leading to accusations of conflicts of interest and concerns that thousands of retail investors have been drawn into trading tokens that are more volatile than bitcoin.
“Call me old-fashioned, but I think presidents should focus on running the country,” said Nick Carter, a founding partner at cryptocurrency venture capital firm Castle Island Ventures and a Trump supporter.
“Not to mention the obvious ‘conflict of interest’ given the fact that Trump can set cryptocurrency policy,” he added.
A major Silicon Valley investor at the World Economic Forum in Davos called Tesla CEO Elon Musk and Trump “the new Crassus and Caesar” — a reference to Roman political figures who formed an alliance to advance their own interests.
“We are seeing real 'end of empire' stuff in the United States,” the person added, noting the creation of billions of dollars in wealth overnight. “Human nature never changes.”
Most of the trading activity in the 200 million Trump coins available was not concentrated in the United States, but rather on little-known Asian exchanges such as BiKing, Gate.io, and Megabit, according to data from CoinMarketCap.
Memecoins have no cash flow, business model, or practical use to back up their valuations. Their value derives from their popularity, which is often as fleeting as the memes they represent.
“Trump memes are intended to serve as an expression of support and engagement with the ideals and beliefs embodied by the symbol ‘$TRUMP’,” the coin’s website states.
The launch of Trump coins comes after the president offered his enthusiastic support for cryptocurrencies during his election campaign. He promised a more industry-friendly system for companies, after executives faced a regulatory crackdown under the Biden administration.
But many in the cryptocurrency industry worry that the launches threaten to further damage the reputation of a sector that is trying to rebuild trust after a series of high-profile scams and collapses.
Meanwhile, some lawmakers worry that retailers could lose significant amounts of money.
“This meme represents the worst of cryptocurrencies,” said Maxine Waters, a Democratic congresswoman and member of the US House Financial Services Committee. “Trump devised a way to circumvent national security and anti-corruption laws, allowing interested parties to anonymously transfer money to him and his inner circle.”
“His economic interest is up for sale,” said Oskar Aslund, chief strategy officer at AKJ, a crypto hedge fund brokerage. “There are no checks and balances here.”
Gettrumpmemes.com did not respond to a request for comment.
“I think this is hurting the industry,” Anthony Scaramucci, founder of SkyBridge Capital and former White House communications director, said during a panel discussion in Davos on Tuesday. “I think this will slow some people down in the regulatory process,” added Scaramucci, whose company runs a digital assets fund.
The world's most popular meme currencies are tokens that reference viral internet moments and characters — like Dogecoin, which represents a Shibu Inu dog; Pepe, a comic green frog; And Vartcoin.
About 80 percent of Trump tokens are owned by CIC Digital, a subsidiary of the Trump Organization, and a CIC-owned company called Fight Fight Fight LLC, according to the token's website — a reference to the attempted assassination of Trump last summer. The companies will also receive a share of trading revenue related to the Trump token.
The tokens held by insiders will be opened for sale in the next three to 12 months.
Following in Trump's footsteps, Lorenzo Sewell, a Detroit pastor who spoke during the president's inauguration, announced the launch of his own currency later that day.
“I want you to do me a favor and go get this coin so we can fulfill the vision that God has called us to achieve on earth,” he said in an online video.
While Trump's promises of cryptocurrency-friendly regulations have been widely welcomed by the industry, executives are skeptical that the president's enthusiasm for memecoins will benefit them in the long run.
“The immediate impact is draining cash and attention away from legitimate projects working on real use cases that the industry desperately needs to prove to the world in 2025,” said Serge Raymond Nzabandura, Director of Corporate Development and Finance at Yield Guild Games. Blockchain company.
Memecoins “will ultimately cost retail investors due to their zero-sum nature. “It is unfortunately ironic that this is what (former SEC Chairman) Gary Gensler was trying to avoid,” he added.
Trump has pledged to “end the oppression” of the cryptocurrency industry and nominated cryptocurrency advocate Paul Atkins to run the regulatory body, leading many to believe that scrutiny of Trump's own coins is unlikely.
In an apparent attempt to stave off potential lawsuits, terms listed on the Trump memecoin website state that users “agree that you will not file, join, or participate in any class action lawsuit with respect to any claim, dispute, or controversy you may have.”
Haley Welch, who created a meme called “Hawk Tuah” based on a viral internet moment, was sued late last year after investors lost money in her token. She said last month that the lawsuit was continuing and that she was “cooperating fully” with lawyers.
“There is no protection for individual investors in this,” Öslund added. “He's kind of above the law, which is also scary.”
