In this sense, says Jacob Silverman, co-author of Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of FraudTRUMP’s coin setup appears to bear some of the hallmarks of a classic “memecoin pump and dump”: a maneuver whereby an issuer holds on to large quantities of its coins, promotes the project, and then cashes out its holdings, thus devaluing the pieces. coin and inflict huge losses on other investors. massive. This is a huge wake-up call,” says Silverman. “Unfortunately, some bad sap is going to get soaked.” (Pumps and dumps occupy a sort of legal gray areasay legal experts, but they are roundly condemned as ethically questionable.)
Melania Trump’s decision to release her own memecoin appears to have already dealt a major blow to TRUMP investors, even in the absence of any potential pump and dump. After the MELANIA coin went live, the TRUMP token the price dropped by 50 percent.
The litany of unofficial Trump-inspired memecoins, including MAGA, YOURSELF Six, Doland Tremp And Super Trump– have also fallen in value. During the 2024 election cycle, political memecoins were used as currency. proxy to bet on the outcome of the election and expressing support for a particular candidate, waxing and waning depending on the events of the election campaign. But TRUMP’s launch inadvertently decimated inventors who purchased unofficial coins as a sign of their support for Trump.
“I don’t think this is appropriate for the President of the United States,” Steven Steele, chief marketing officer of the MAGA token, said in a statement. video posted on X. “This seems like a blatant money grab.”
Perhaps more dangerous than the financial losses suffered by supporters, Trump’s memecoin could also serve as a new vector for corruption, Silverman claims. By investing large sums in a cryptocurrency in which Trump has a significant financial interest, thereby driving up its price, politically motivated actors could curry favor with the president without any sort of direct transaction taking place, he says. “These are types of channels of influence and leverage of a kind that we haven’t really seen before,” Silverman says.
The release of an official Trump memecoin marks the latest development in the president’s ongoing flirtation with crypto. Although during his first term, Trump dismissed Bitcoin as a “scam“, he made a complete about-face as the 2024 presidential election approaches. As leading figures in the crypto industry approved his presidency And threw away hundreds of millions of dollars in donations During pro-crypto super political action committees, Trump began introducing himself as the “crypto president.”
In July, speaking to thousands of bitcoiners At a conference in Nashville, Tennessee, Trump promised to make the United States the “crypto capital of the planet” and establish a “bitcoin stock» if he is re-elected. Then, in September, the Trump family helped launch a new crypto company, World Liberty Financial, which they billed as a way to “make finance great again.” (It remains unclear what services World Liberty Financial will provide.)
World Liberty Financial was encountered skepticism by some members of the crypto industry, who feared that the project could lead to losses among investors and lasting damage to its reputation if it failed. The same logic applies to the TRUMP memecoin. “If this blows up in front of a lot of people, it will be very serious, because the media attention will be negative,” says Bendiksen.
Yet despite all the potential consequences, nothing stops Trump from testing the limits of what’s acceptable with crypto, Silverman says, as others have done before him. Especially since he prepares to overhaul the SECthe financial regulator who most aggressively pursued the crypto industry under the previous administration.
“In a way, he’s just another crypto entrepreneur,” Silverman says. “He happens to be the president.”