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In this sense, says Jacob Silverman, co-author of Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraudthe TRUMP coin setup appears to have some of the hallmarks of a “classic memecoin pump-and-dump” — a maneuver whereby an issuer holds a large amount of its coin, promotes the project, then cashes in its holdings , devaluing the currency and dealing huge losses to other investors. “When you have insider distribution of 80 percent, the risk that it will be dumped on the public or that there will be some kind of major sale is just massive. That’s a big red flag,” says Silverman. “Unfortunately, some poor zucchini will be embalmed.” (Pump-and-dumps occupy some of a legal gray arealegal experts say, but they are condemned in an ethically questionable way.)
Melania Trump’s decision to release her own memecoin appears to have already dealt a blow to TRUMP investors, even in the absence of any alleged pump-and-dump power. After the MELANIA coin went live, the TRUMP token fell in price by 50 percent.
The litany of unofficial Trump-inspired memecoins — among them MAGA, YOURSELF You are, Doland Tremp and Super Trump– have also decreased in value. During the 2024 election cycle, political memecoins were used as the proxy for betting on the outcome of the election and express support for a particular candidate, rising and falling with events on the campaign trail. But the launch of TRUMP inadvertently decimated the inventors who bought unofficial coins as a mark of their support for Trump.
“I don’t think this is appropriate for the president of the United States,” says Steven Steele, director of marketing for the MAGA token, in a video posted to X. “This just looks like an egregious cash grab.”
Perhaps more dangerous than the financial losses brought to supporters, Trump’s memecoin could also act as a new vector of bribery, says Silverman. He invests large sums in a cryptocurrency in which Trump has a large financial interest, therefore, by increasing its price, motivated political actorsare are able to curry favor with the president without any direct transaction, he says. “These are kinds of channels for influence and leverage of a kind that we haven’t really seen before,” says Silverman.
The release of an official Trump memecoin marks the latest development in the president’s ongoing flirtation with crypto. Although in his first term Trump rejected bitcoin as “scam“, made a complete about-face before the 2024 presidential election. As figures from the cryptographic industry approved his presidency and launched hundreds of millions of dollars in donations to the super pro-crypto political action committees, Trump began presenting himself as the “crypto president.”
In July, speaking to thousands of bitcoiners at a conference in Nashville, Tennessee, Trump promised to turn the United States into the “crypto-capital of the planet” and establish a “national”.stockpile of bitcoin” re-elected. Then in September, the Trump family helped launch a new cryptocurrency, World Liberty Financial, which they presented as a way to “make finance great again.” (It’s not clear what services World Liberty Financial provide.)
World Liberty Financial was met with skepticism from some members of the crypto industry, who are concerned that the project could lead to losses among investors and deal lasting reputational damage if it fails. The same logic applies to the TRUMP memecoin. “If this totally blows up in a lot of people’s faces, it’s going to be super bad, because the media attention is going to be negative,” says Bendiksen.
Yet for all the potential consequences, there is little to stop Trump from testing the limits of what is acceptable with crypto, says Silverman, as others have done before him. Especially like him it is appreciated to review the SECthe financial regulator that more energetically pursue the crypto industry under the previous administration.
“In some ways, it’s just another crypto entrepreneur,” says Silverman. “I’m just the president.”
