US President Donald Trump has been criticized for launching a meme coin while saying he “doesn’t know much” about the cryptocurrency.
The cryptocurrency, called TRUMP, appeared on his social media accounts ahead of his inauguration on Monday and quickly became one of the most valuable cryptocurrencies. The value of one coin rose to $75 within one day, but has since fallen to $39.
But the launch of the so-called meme coin — a cryptocurrency that has no use other than for fun or speculation — has been widely criticized by industry insiders.
“Trump’s comments about not knowing much about currency support my opinion that he is making fun of the industry,” says Danny Scott, CEO of CoinCorner. “It’s a ploy.”
The latest drop in value came after Trump told reporters: “I don’t know much about it except that I launched it, other than that it was very successful.”
When told that his coin had raised several billion dollars for him, he downplayed it, saying, “Several billion — that’s a pittance for these guys,” referring to the tech billionaires gathered for a press conference about artificial intelligence.
Meme coins are often used by scalpers to make money or to allow fans to show support for a celebrity or moment in internet culture.
This is not the first time Trump has sold cryptocurrency products. He made millions from releasing a series of NFTs of his in various superhero modes in 2022.
Some industry analysts say the president getting his own meme coin is a sign that others should follow.
“Trump’s token just signaled to every corporation, municipality, university and individual brand that cryptocurrencies can now be used as a capital formation and customer bootstrapping mechanism,” Jeff Dorman of investment firm Arca posted online.
However, the general sentiment seems to be negative towards the President’s Coin.
Many in the cryptocurrency world are waiting for Trump to back up on his campaign promises to help boost the industry in the United States. People like Danny Scott hope to see focused plans from the administration, especially regarding Bitcoin.
Last year, Trump promised Bitcoin fans that he would make the United States the “cryptocurrency capital of the planet.” A few days into his term, the president has not issued executive orders related to cryptocurrencies, nor mentioned them in his speeches.
Trump Coin is now the 25th most valuable cryptocurrency with a value of about $8 billion, according to CoinMarketCap.
Trump and the team behind him own 80% of the coins, so, in theory, they would make billions of dollars if they sold their shares and the price stayed the same.
Cryptocurrency researchers at K33 have described this setup as outdated relative to similar tokens.
“There’s no sugarcoating these economic tokens are terrible for a meme coin,” K33 analyst David Zimmerman said.
However, K33 analysts admit that the remaining 80% of the coins cannot be put on the open market, so investors are partially protected from price shocks.
There are thousands of cryptocurrencies and anyone can create one.
First Lady Melania Trump launched her own cryptocurrency on the eve of the inauguration, which is now worth $700 million since dropping from $13 per coin to $2.70.
But many meme currencies have led to significant losses for people who invest in them.
Dan Hughes, of cryptocurrency company Radix, believes the president and his wife’s launch of their own digital currencies undermines the positives of the industry.
“This pattern of celebrity-led token launches, especially from political figures, potentially represents a worrying trend in cryptocurrency markets where manipulation of influence and liquidity can overshadow fundamental value creation,” he said.
Others in the cryptocurrency world believe that releasing coins to make money is insulting.
“The offering of these coins during the presidential inauguration raises concerns about potential conflicts of interest and may undermine the dignity of the president and the first lady,” said Grzegorz Drozdz, market analyst at Konotoxia investment firm.
