The creation of billions of dollars of digital wealth for the Trump Organization began Friday with a social media post.
At 9:44 p.m. ET, the then-president-elect announced the creation of a new digital token: $TRUMP.
“My NEW official Trump meme is HERE!” It’s time to celebrate everything we stand for: WINNING! » Donald Trump’s X account published. “Join my very special Trump community. GET YOUR $TRUMP NOW. Go to http://gettrumpmemes.com — Have fun! »
The announcement came without much fanfare. But what would happen in the coming days — including wild price swings and Melania Trump’s own digital token — would shake up the crypto community, including some Trump supporters, just as he was about to return in the Oval Office.
The $TRUMP and $MELANIA tokens, as they are known on social media, belong to the crypto category known as memecoins – digital assets that use blockchain technology similar to bitcoin.
Since there are no assets such as the underlying cash flows that support memecoins like $TRUMP and $MELANIA, anyone who owns them will only make money if they sell them at a higher price than from which he bought them.
This includes the coin creators – as well as Trump and his family – themselves.
Although they have long been a part of the cryptocurrency universe, memecoins have been on the rise in recent months. experienced a resurgence after Trump emerged victorious in November and promised to embrace blockchain technology and crypto markets.
In the case of $TRUMP and $MELANIA, the coins were launched on Solana, a blockchain that collects fees to process transactions and is known for its faster throughput, meaning it is less likely to crash when trading volumes are high. It is not clear who knew about their launch before it took place, other than the coins’ developers and the Trump Organization.
The multitude of recent memecoin launches have sparked new skepticism And warnings about scams due to the free nature of memecoins. Because they are not formal investment vehicles, they are almost entirely unregulated and anyone can set up 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 as “the crystallization of a “dumber” investment, of an asset that is only worth what someone else is willing to pay for it at any given time.”
“I’m not sure people really understand how much the crypto world is reacting to Trump Memecoin launches,” software engineer and cryptocurrency columnist Molly White said. posted on alongside screenshots of reactions ranging from frustration to anger.
White later told NBC News that the coin launch appeared to dash some people’s hopes that Trump would help further legitimize the crypto industry.
“There’s now a concern that people who aren’t very familiar with this industry will see it as a money grab and won’t see all the good uses of crypto that are out there,” she said. “They fear it will give crypto a bad name.”
Part of this frustration centered on Trump’s recent emergence as a champion of all things crypto. During his 2024 presidential campaign, Trump made his support for crypto clear, speaking at the annual Bitcoin conference and pledged to consider creating a “strategic bitcoin reserve” that would see the United States purchase billions worth of the cryptocurrency in a bid to encourage price support and adoption. Trump has also launched a line of NFTs and his family launched a crypto banking platform last year.
And Trump’s memecoin seemed poised for major success, at least at first. The price of $TRUMP took off almost immediately, and as of Saturday morning, a single coin was trading at $75, up at least 650% from its launch price on Friday. Crypto enthusiasts who track transactions – many blockchains, including the one used by $TRUMP, are publicly available – have reported that some holders purchased the token worth millions of dollars early.
A spokesperson for Trump’s transition team did not immediately respond to a request for comment.
The $TRUMP surge suddenly reversed when another coin entered the picture – that of Trump’s own wife.
On Sunday afternoon, Melania Trump’s X account published that his memecoin $MELANIA was live. Donald Trump’s X account reposted this message.
The price of $TRUMP immediately plunged upon the emergence of $MELANIA, with some suggesting that demand for one would eat into interest in the other.
“$MELANIA coin is considered a competitor to $TRUMP coin”, market feedback group The Kobeissi Letter written on X. “This led to a sharp drop in demand for $TRUMP.”
Later Sunday, a $BARRON coin also started tradingfurther adding to market concerns. However, $BARRON’s connection, if any, to Trump’s youngest son, Barron, or to the Trump family was unclear. No official Trump social media accounts have posted a message about this.
As the price of $TRUMP began to fall, negative reactions ensued.
“Dear @realDonaldTrump: Please fire anyone who recommended proceeding with Melania’s launch today,” Ryan Selkis, longtime crypto advocate and political conservative, wrote on X Sunday as the price of $TRUMP began to fall. “1. They don’t know what they’re doing. 2. They cost you a lot of money and goodwill. 3. They don’t think about your best interests.
As of Tuesday, the price of $TRUMP had not recovered from the decline. Yet shortly after Trump was sworn in, the combined holdings of the Trump- and Melania-linked companies that flipped the coins were worth tens of billions, at least on paper. according to crypto news site CoinDesk – and may be worth more.
Since the wallets of all holders, including those of Trump and the coin’s creators, are visible on the blockchain, any transactions they are involved in will be closely monitored. And a massive sell-off of these wallets would likely trigger a significant price drop, according to Ari Redbord, head of legal and government affairs at TRM Labs, a company that monitors crypto projects.
But Redbord said Trump’s celebrity adds a factor worth watching.
“Clearly, Trump, because of who he is, elevates the launch of a memecoin like we’ve never seen before,” he said.
Trump has released a voluntary ethics document designed to prevent private financial interests from shaping its official political agenda.
But the president’s involvement in the crypto project also raises questions about its potential use by illicit actors or foreign governments, Redbord said.
Consumers need to understand that there are “far fewer” protections with memecoins than with traditional stocks, he said.
“It’s very volatile,” Redbord added, saying “consumers really need to understand what they’re investing in because you’re going to lose big and you could potentially win big.”
Mark Cuban, a tech investor and ardent Trump critic who has also been involved in crypto, warned on the victims.
“Hello to all the scams aimed at everyone and everyone who has no idea about crypto” Cuban declared on X Monday about coins. “Goodbye, whatever hope the crypto industry has of legitimizing itself.”