Trump’s meme coin angers cryptocurrency community

For introducing a meme-coin while claiming he “doesn’t know much” about it, US President Donald Trump has come under fire.

Prior to his inauguration on Monday, the digital currency known as TRUMP surfaced on his social media pages and swiftly rose to the top of the cryptocurrency market. Within a day, a single coin’s value soared to $75, but it has since dropped to $39.

But industry insiders have openly criticized the introduction of the so-called meme-coin, a cryptocurrency that has no use beyond speculation or amusement.

My belief that Trump is disparaging the business is supported by his remarks that he doesn’t know anything about the coin. “It’s a stunt,” CoinCorner CEO Danny Scott says.

According to Trump, “I don’t know much about it other than I launched it, other than it was very successful.” This statement caused the most recent decline in value.

Several billion – that’s peanuts for these guys” was his way of downplaying the fact that his coin had brought in several billion dollars for him, referring to the tech billionaires gathered for an AI press conference.

Meme-coins are frequently utilized by speculators to profit or as a way for supporters to support a celebrity or online phenomenon.

Trump has already offered cryptocurrency products. In 2022, he launched a series of NFTs featuring him in several superhero stances, earning millions of dollars.

The president having his own meme coin is a hint that others should follow, according to some industry analysts.

Jeff Dorman of the investment firm Arca wrote on the internet, “The TRUMP token just signaled to every company, municipality, university, and individual brand that crypto can now be used as a capital formation and customer bootstrapping mechanism.”

Many in the cryptocurrency community are waiting for Trump to fulfill his campaign pledges to support the growth of the US market. People like Danny Scott want to see the administration make targeted initiatives, especially with regard to Bitcoin.

Trump made the promise to turn the US into the “crypto capital of the planet” to Bitcoin enthusiasts last year. Only a few days into his presidency, the president has made no mention of cryptocurrency in his speeches or signed any executive orders pertaining to it.

With a valuation of almost $8 billion, TRUMP coin is now ranked as the 25th most valuable cryptocurrency by CoinMarketCap.

Theoretically, Trump and the team behind it would profit billions of dollars if they sold their shares and the price stayed the same because they hold 80% of the coins.

Crypto experts at K33 have characterized this configuration as antiquated for tokens of a similar nature.

There’s no sugar-coating this – these tokenomics are horrendous for a meme-coin,” warned K33 analyst David Zimmerman.

K33 researchers do admit, though, that investors are somewhat protected from price shocks because the remaining 80% of coins cannot be dumped on the open market.

Anyone can produce one of the thousands of cryptocurrency coins available.

On the day of the inauguration, First Lady Melania Trump introduced her own meme coin, which has since plummeted from $13 to $2.70. Today, it is worth $700 million.

However, several meme-coins have caused investors to lose a lot of money.

According to Dan Hughes of the cryptocurrency company Radix, the president and his spouse’s introduction of their meme-coins undercuts the industry’s advantages.

This pattern of celebrity-driven token launches, particularly from political figures, potentially marks a concerning trend in crypto markets where influence and liquidity manipulation could overshadow fundamental value creation,” he stated.

Some bitcoin enthusiasts believe that creating meme-coins to generate revenue is demeaning.

According to Grzegorz Drozdz, market analyst at investment firm Conotoxia, “the introduction of these coins during the presidential inauguration raises concerns about potential conflicts of interest and may undermine the dignity of the president and the first lady.

FAQ

TRUMP coin is a meme cryptocurrency launched by President Donald Trump before his inauguration. Despite its initial success in the market, it has faced backlash for lacking practical use and being perceived as a publicity stunt. Critics argue it undermines the integrity of the cryptocurrency industry.

The coin quickly gained traction, reaching a value of $75 per coin within a day but has since dropped to $39. Its market valuation is nearly $8 billion, making it the 25th most valuable cryptocurrency.

Experts, like analysts at K33, describe TRUMP coin’s tokenomics as outdated, highlighting issues like 80% of the coins being held by Trump and his team. This setup has been criticized for potentially benefiting the creators disproportionately while limiting investor security.

This is not Trump’s first foray into the crypto space. In 2022, he launched a series of NFTs featuring himself in superhero stances, which earned millions. However, his involvement with meme coins has further intensified debates about the ethical implications of celebrity-driven crypto ventures.

Many experts believe that such initiatives risk overshadowing the industry’s focus on innovation and practical applications. They argue that celebrity-driven token launches, especially from political figures, could undermine credibility, encourage speculative behavior, and dilute the fundamental values of the crypto market.

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