Trump Memecoin’s ‘Money-Grab’ Economy

In this sense, co-author Jacob Silverman argues Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of FraudThe TRUMP coin structure appears to bear some of the hallmarks of a “classic memecoin pump and dump” — a maneuver in which the issuer holds a large amount of its coin, promotes the project, and then cashes in its own shares. causing huge losses to the coin and other investors. “When you distribute 80 percent insiders, the risk is only massive that there will be a public or some kind of big sale. That’s a huge red flag,” Silverman asserts. “Unfortunately, some poor sap is going to get wet.” (Pumps and dumps take something a legal gray arealegal experts say, but are condemned as ethically dubious.)

Melania Trump’s decision to launch her own memecoin appears to have already hit TRUMP investors, even without any potential pump-and-dump potential. TRUMP token after MELANIA coin is active 50 percent cheaper.

A litany of unofficial Trump-inspired memecoins — among them MAGA, YOURSELF Six, Donald Trump and Super Trump– the value also decreased. During the 2024 election cycle, political memecoins were used as one power of attorney to bet on election results and express support for a particular candidate, rising and falling with events on the campaign trail. But the TRUMP launch accidentally destroyed the unofficial money of the inventors who bought the unofficial coins as a token of their support for Trump.

“I don’t think it’s appropriate for the president of the United States,” said Steven Steele, director of marketing for the MAGA token. video Sent to X. “It just seems like a terrible money grab.”

Silverman argues that perhaps more dangerous than the financial losses to supporters, the Trump memecoin could also serve as a new vector for bribery. He argues that by investing heavily in cryptocurrency, which is Trump’s major financial interest, and thus driving up its price, politically motivated actors can curry favor with the president without any direct dealings. “These are influences and tools of influence that we haven’t seen before,” says Silverman.

The launch of the official Trump memecoin marks the latest development in the president’s ongoing flirtation with cryptocurrency. Although Trump rejected bitcoin during his first term.fraud,” he delivered in full voice ahead of the 2024 presidential election. As figures in the cryptocurrency industry confirmed his presidency and donated hundreds of millions of dollars Trump has started presenting himself as “like” on the pro-crypto super political action committees.president of crypto.”

Speaking in July thousands of bitcoiners At a conference in Nashville, Tennessee, Trump announced that he would make the United States “the cryptocurrency capital of the planet” and that the national “onebitcoin reserve” if re-elected. In September, the Trump family helped launch a new cryptocurrency business, World Liberty Financial, which they pitched as a way to “make finance good again.” (It is unclear what services World Liberty Financial will provide.)

It was World Liberty Financial was met with skepticism By some members of the crypto industry who are concerned that the project could cause losses among investors and damage its long-term reputation if it fails. The same logic applies to TRUMP memecoin. “If it completely blows up in a lot of people’s faces, it will be very bad because the media attention will be negative,” says Bendiksen.

Silverman says that despite all the potential consequences, as others have done before him, there is little to stop Trump from testing the boundaries of what is acceptable with cryptocurrency. Especially like him It is preparing to overhaul the SECwhich is a financial regulator most vigorously pursued the crypto industry under the previous administration.

“In some ways, he’s another crypto entrepreneur,” Silverman says. “He just happens to be president.”