The cryptocurrency world has been rocked by the launch of a new meme coin by US President-elect Donald Trump, with both industry figures and critics raising alarms over its rapid rise and potential risks. The token, dubbed $TRUMP, was unveiled on Friday evening and quickly surged in value from $6 to more than $70 within a 24-hour period. However, despite the meteoric rise, the coin’s volatility has prompted concerns that it could undermine the cryptocurrency market’s credibility.
Trump’s entry into the digital currency space is nothing new when viewed in the context of his long history of leveraging his personal brand for profit. From Trump Steaks to Trump Vodka, the former president has long capitalized on his name to promote various products. But the $TRUMP coin, which saw Trump affiliate companies holding 80 percent of the total supply, is arguably his most audacious move yet.
At one point over the weekend, Axios estimated that the value of the $TRUMP coin momentarily accounted for 89 percent of Trump’s net worth, making him one of the richest people in the world. However, the initial frenzy was followed by a swift decline in the coin’s value, with the price plummeting from its high, and concerns about the token’s long-term viability mounting.
$TRUMP, along with Melania Trump’s $MELANIA coin, are both classified as memecoins—cryptocurrencies that are driven primarily by social media hype and have little to no underlying business or economic value. Experts have warned that such coins are inherently volatile and often lead to massive losses for late investors, as witnessed in the sharp rise and fall of other popular memecoins like Dogecoin ($DOGE).
“The launches are now clearly a blight that we will have to work to put behind us as builders,” said Rob Hadick, a general partner at Dragonfly Capital, in a statement to The Atlantic. The fear is that these unpredictable coins could damage the credibility of the entire industry, especially as the market tries to transition into a more legitimate and regulated space.
Despite the volatility, Trump’s $TRUMP coin could be seen as a natural extension of his branding strategy. Throughout his career, the former president has shown an uncanny ability to monetize his name, and the crypto industry is no different. Trump has long positioned himself as a powerful ally of the crypto space, even pledging to make the US the “crypto capital of the planet.” In fact, the announcement of $TRUMP coincided with the “Crypto Ball,” a pre-inauguration event that celebrated the growing influence of cryptocurrency, hosted by tech entrepreneur David Sacks.
Trump’s embrace of the crypto world marks a stark contrast to his earlier dismissals of digital currencies. While he once called Bitcoin a “scam,” his recent moves indicate a shift in his position, potentially leading to a more hands-off approach to the industry during his second term.
However, the legality of such meme coin launches remains murky. The US Securities and Exchange Commission (SEC) has previously cracked down on cryptocurrencies that appear to violate securities laws, but the potential appointment of Trump’s own SEC chair could lead to a more lenient regulatory environment for the crypto industry.
Some experts are also concerned that the lack of regulation in the memecoin market could make it an easy target for malicious actors, including foreign interests. There is growing concern that such tokens could be used to manipulate global markets or fund illicit activities.
While some crypto supporters have embraced Trump’s efforts to promote digital assets, others are less optimistic about the long-term effects. Balaji Srinivasan, a prominent crypto investor, warned on social media that memecoins are a “zero-sum” game, where early investors profit at the expense of those who buy in too late. Nic Carter, another investor, echoed these sentiments, telling The Atlantic that the $TRUMP coin has exposed “the worst parts of the crypto industry to the public eye.”
The crypto industry, which has long battled skepticism and calls for regulation, now finds itself in a difficult position. As the market nears what some have hoped would be its moment of legitimacy, Trump’s latest venture may have set it back, and critics worry that the long-term effects of his memecoin experiment could have lasting repercussions on the future of digital currencies.
