Donald Trump, never one to miss a branding opportunity, has launched his latest venture: a cryptocurrency token called $TRUMP. This move, coming after a history of selling everything from steaks to sneakers, demonstrates his continued efforts to monetize his personal brand.
Following its Friday evening launch, the price of $TRUMP surged, rocketing from $6 to over $70 within a day. The rapid rise in value was fueled by the fact that Trump-linked entities reportedly control a large portion of the token supply. At one point, the token’s value momentarily accounted for a significant portion of his net worth. Subsequently, Melania Trump announced her own coin, $MELANIA.
However, both $TRUMP and $MELANIA are memecoins, lacking inherent business fundamentals or practical use cases. These tokens are often created rapidly and experience volatile price swings, frequently followed by substantial losses for late investors. This pattern is common, with many similar coins experiencing dramatic value declines shortly after launch. Although Trump’s influence might offer $TRUMP some staying power, the token remains highly volatile.
In many ways, the $TRUMP token seems like a logical step for the former president. Trump has actively cultivated an image as a supporter of the crypto industry, even discussing the potential of a “strategic national bitcoin stockpile.” Trump’s announcement of the coin on Truth Social coincided with a “Crypto Ball,” a high-profile event highlighting the industry’s integration into wider society. This move suggests a friendly stance towards the sector, especially after a period of regulatory scrutiny.
The legality of memecoins, and the specific ramifications for $TRUMP, remains under debate, particularly in the context of existing securities laws. It’s also uncertain what Trump’s new, potentially vast, wealth in the form of the token will translate to in the real world, considering much of the supply has not been released yet, and attempting to cash out could tank the value. Despite this, Trump’s actions point towards a more lenient approach to the crypto industry.
It is important to remember that Trump called bitcoin a “scam” just a few years ago, when crypto didn’t suit his interests. Now that his interests are so highly tied to the crypto market, he is far less likely to make similar criticisms.
Furthermore, the lightly regulated nature of memecoins presents risks, as anyone can acquire them, potentially including those with malicious intent. Concerns have arisen that foreign interests could gain control of Trump’s cryptocurrency, potentially undermining his promises of an “America-first” economic policy. There is also the possibility that Trump’s memecoin could encourage other political and cultural leaders to release similar coins. This could lead to unforeseen consequences with respect to national economic interests.
While many in the crypto world await Trump’s return to office, concerns are rising among some of the industry’s most ardent supporters. They are worried that memecoins might negatively impact the industry’s image. Investors such as Balaji Srinivasan have warned that memecoins are “zero-sum” ventures. Nic Carter, a prominent crypto investor and Trump supporter, notes that the launch of $TRUMP could have exposed the worst parts of the crypto industry to wider public scrutiny.
Ultimately, the $TRUMP token represents a continuation of Trump’s brand-focused strategy. However, its nature as a memecoin suggests a high level of speculative risk. A Trump steak, at least, is a tangible product. $TRUMP holders may receive no such thing.
