With Trump’s cryptocurrencies, billions of dollars — and the credibility of cryptocurrencies — are at stake
construction Billions of dollars in digital wealth The Trump Organization began with a social media post on Friday.
At 9:44 PM ET, the then-president-elect announced the creation of a new digital token: $TRUMP.
“The new official Trump meme is here! It’s time to celebrate everything we stand for: winning! Donald Trump With your time!
The announcement came without much fanfare. But what happens in the coming days — including wild price swings and Melania Trump’s digital token — would unsettle the cryptocurrency community, including some Trump supporters, just as he was set to return to the Oval Office.
The $TRUMP and $MELANIA tokens, as they are referred to on social media, belong to the category of cryptocurrencies known as memecoins – digital assets that use blockchain technology similar to Bitcoin.
Since there are no assets such as underlying cash flows backing meme currencies like $TRUMP and $MELANIA, anyone who owns them will only make money if they sell them at a higher price than they bought them at.
This includes the coin makers – and Trump and his family – themselves.
Despite being part of the cryptocurrency world for a long time, in recent months memes have enjoyed a resurgence following Trump’s victory in November and his promise to embrace blockchain technology and the cryptocurrency markets.
In the case of $TRUMP and $MELANIA, the coins were launched on Solana, a blockchain network that collects fees for processing transactions and is known for its faster throughput, meaning it is less likely to be halted when transaction volume is high. It is not clear who knew about its launch before it happened other than the coin developers and the Trump Organization.
There have been a large number of recent memecoin launches New doubts and Warnings about scams Because of the free nature of meme currencies. Because they are not formal investment vehicles, they are almost completely unregulated, and anyone can start one under any name at any time, often for free. Platforms like CoinMarketCap that track digital tokens have shown dozens of duplicate Trump coins.
Bloomberg News summary Memecoin sales are “the crystallization of the ‘biggest fool’ investment, of an asset that is only worth what someone else is willing to pay for it at a given moment in time.”
“I’m not sure people fully understand how much the cryptocurrency world has reacted to Trump’s launch of the memecoin,” says Molly White, a software engineer and cryptocurrency historian. Published on X Along with screenshots of reactions that ranged from frustration to anger.
White later told NBC News that the launch appeared to dash some’s hopes that Trump would help legitimize the cryptocurrency industry.
“There is now a fear that people who are not very familiar with this industry will view it as a cash grab and not see all the good uses for cryptocurrencies that exist,” she said. “They are concerned that this will give cryptocurrency a bad reputation.”
Part of that frustration has centered on Trump’s recent emergence as a champion of all things cryptocurrency. During his 2024 presidential campaign, Trump made his support for cryptocurrencies clear, speaking at the annual Bitcoin conference and pledging to consider creating a “strategic Bitcoin reserve” that would see the United States purchase billions of dollars worth of the cryptocurrency in an attempt to encourage price support. And adoption. Trump has also launched a line of NFTs, and his family launched a cryptocurrency banking platform last year.
The Trump meme appeared to be on the verge of a big hit, at least at first. Trump’s price soared almost immediately, and by Saturday morning, one coin was trading at $75 — a 650% rise, at least, from its launch price on Friday. Cryptocurrency enthusiasts tracking transactions — many blockchains, including the one used by $TRUMP, are public facing — report that some owners who bought early own millions of dollars’ worth of the token.
A spokesman for Trump’s transition team did not immediately respond to a request for comment.
Trump’s price rally was suddenly reversed when another coin appeared on the scene – from Trump’s wife.
Sunday afternoon, Melania Trump X account published That her memecoin $MELANIA was live. Donald Trump X’s account reposted that message.
Trump’s price fell immediately after Melania’s appearance, with some suggesting that demand for one would impact interest in the other.
“The $Melania coin is viewed as a competitor to the $Trump coin,” the market commentary group said Al Qubaisi’s letter was written on X. “This has led to a sharp decline in demand for the Trump dollar.”
Later on Sunday, $BARRON also appeared I started tradingWhich increases market concerns. However, $BARRON’s relationship, if any, to Trump’s youngest son, Barron, or to the Trump family has not been clear. No official Trump accounts on social media posted anything about this.
When Trump’s price began to fall, a backlash ensued.
“Dear @realDonaldTrump: Please fire everyone who recommended moving forward with Melania’s launch today,” Ryan Selkis, a longtime cryptocurrency advocate and political conservative, said. He wrote on X on Sunday As Trump’s price began to decline. “1. They don’t know what they’re doing. 2. They’re costing you a lot of dollars and goodwill. 3. They don’t have your best interests in mind.
By Tuesday, Trump’s price had not recovered from the decline. However, shortly after Trump was sworn in, the combined holdings between Trump- and Melania-linked companies that launched the coins were worth tens of billions, at least on paper. According to cryptocurrency news site CoinDesk -It’s probably worth more.
Since the wallets of all coin holders, including Trump’s wallets and coin creators, are visible on the blockchain, any transactions they participate in will be closely monitored. Large sell-offs from those wallets are likely to lead to a significant drop in prices, according to Ari Redbord, head of legal and government affairs at TRM Labs, a company that monitors cryptocurrency projects.
But Redbord said Trump’s fame adds a factor worth watching.
“It is clear that Trump, because of who he is, is raising the bar for memecoin launches in a way we have never seen before,” he said.
Trump did Released A voluntary ethics document intended to limit private financial interests from shaping his official policy agenda.
But Redbord said the president’s involvement in the cryptocurrency project also raises questions about potential use by illicit actors or foreign governments.
He said consumers need to realize that there are “far fewer” protections with meme currencies than with traditional stocks.
“It’s very volatile,” Redbord added, saying, “Consumers really need to understand what they are investing in, because you stand to lose a lot and potentially gain a lot.”
Mark Cuban, a technology investor and ardent Trump critic who has also been involved in cryptocurrencies, warned on
“Welcome to every scam that targets everyone and anyone who has no idea about cryptocurrencies.” Cuban said on X on Monday About coins. “Goodbye to any hope the cryptocurrency industry had of legitimizing itself.”
