In this sense, Jacob Silverman, co-author of Making Money Easy: 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 in which an issuer holds large amounts of its coin, promotes the project, and then cashes out its assets, thereby increasing the value of the coins is devalued. currency and handing out big losses to other investors. “If you have an insider distribution of 80 percent, the risk that it will be dumped to the public or that there will be some kind of big sell-off is simply high. enormous. It's a huge red flag,” Silverman claims. “Unfortunately, some poor saps will get soaked.” (Pump-and-dumps are in a legal gray area, legal experts say, but are roundly condemned as ethically questionable.)
Melania Trump's decision to release her own memecoin already appears to have dealt a blow to TRUMP investors, even without any alleged potential pump-and-dump. After the MELANIA coin went live, the TRUMP token dropped 50 percent in price.
The litany of unofficial Trump-inspired memecoins – including MAGA, MAGA Hat, Doland Tremp and Super Trump – have also fallen in value. During the 2024 election cycle, political memecoins were used as a proxy for betting on the outcome of the election and expressing support for a particular candidate, rising and falling with events on the campaign trail. But TRUMP's launch has inadvertently decimated inventors who bought unofficial coins as a sign of their support for Trump.
“I don't think this is appropriate for the President of the United States,” said Steven Steele, marketing director of the MAGA token, in a video posted to X. “This just seems like a blatant money grab.”
Trump's memecoin may be more dangerous than the financial losses suffered by supporters, but it could also act as a new vector for bribery, Silverman claims. By investing large sums in a cryptocurrency in which Trump has a major financial stake, and thereby driving up its price, politically motivated actors could curry favor with the president without any direct transaction taking place, he claims. “These are channels of influence and power that we haven't seen before,” Silverman said.
The release of an official Trump memecoin marks the latest development in the president's continued flirtation with crypto. Although Trump dismissed bitcoin as a “scam” in his first term, he staged a complete about-face in the run-up to the 2024 presidential election. When crypto industry figureheads endorsed his presidency and shifted hundreds of millions of dollars in donations to pro-crypto super political action committees, Trump began to cast himself as the “crypto president.”
In July, speaking to thousands of bitcoiners at a conference in Nashville, Tennessee, Trump promised that he would make the US the “crypto capital of the planet” and build a national “bitcoin stockpile” if he were re-elected. Then in September, the Trump family helped launch a new crypto company, World Liberty Financial, which they pitched as a way to “make finance great again.” (It remains unclear what services World Liberty Financial will provide.)
World Liberty Financial was met with skepticism by some members of the crypto industry, who worried that the project could lead to losses among investors and cause lasting reputational damage if it fails. The same logic applies to the TRUMP memecoin. “If this blows up in a lot of people's faces, it will be super bad, because the media attention will be negative,” says Bendiksen.
But despite all the potential consequences, there's little to stop Trump from testing the boundaries of what's acceptable with crypto, Silverman says, as others have done before him. Especially as he prepares to overhaul the SEC, the financial regulator that most vigorously pursued the crypto industry under the previous administration.
“In some ways he's just a crypto entrepreneur,” says Silverman. “He just happens to be the president.”
