In this sense, co-author Jacob Silverman Easy Money: Digital Currency, Casino Capitalism, and the Golden Age of FraudTRUMP’s coin launch appears to have some of the hallmarks of a “classic Memcoin pump and dump” — a maneuver whereby an issuer holds large amounts of its coin, promotes the project, then liquidates its holdings and its value. reduces coin and causing huge losses to other investors. “When you have 80 percent domestic distribution, there is a risk of spillover. The general public or that there will be some sort of wholesale sale is huge. Silverman claims this is a huge red flag. “Unfortunately, some weak saps get wet.” (Legal experts say pump-and-dump occupies something of a legal gray area, but is thoroughly condemned as morally dubious.)
Melania Trump’s decision to issue her own memecoin appears to have already hit TRUMP investors, even without any possible pump and dump. After MELANIA coin activation, TRUMP token dropped by 50%.
A slew of unofficial Trump-inspired memes — including the MAGA, MAGA Hat, Doland Tremp and Super Trump — are also down in value. During the 2024 election cycle, political odds were used as a proxy to bet on the outcome of the election and express support for a particular candidate, which fluctuated with events on the campaign trail. But the TRUMP launch inadvertently killed off inventors who bought unofficial coins as a sign of 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, in a video posted to X.
Perhaps more dangerous than the financial losses to supporters, the Trump coin meme could serve as a new enabler for bribery, Silverman contends. He claims that by investing huge sums in a digital currency in which Trump has a large financial interest, thereby driving up its price, politically motivated actors can curry favor with the president without making any direct deals. “These are channels for penetration and leverage that we haven’t really seen before,” Silverman asserts.
Trump’s release of an official memecoin marks the latest development in the president’s ongoing flirtation with digital currencies. Although Trump dismissed Bitcoin as a “fraud” during his first term in office, he went full steam ahead of the 2024 presidential election. As crypto industry figures endorsed his presidency and donated hundreds of millions of dollars to pro-crypto political action committees, Trump began calling himself the “Crypto President.”
In July, Trump spoke to thousands of bitcoiners at a conference in Nashville, Tennessee and promised to make the US the “crypto capital of the planet” and create a national “bitcoin reserve” if re-elected. Then in September, the Trump family helped launch a new cryptocurrency business, World Liberty Financial, which they pitched as a way to “make finance great again.” (It remains to be seen what services World Liberty Financial will provide.)
World Liberty Financial faced skepticism from some members of the crypto industry, who worried that if the project failed, it could result in losses for investors and lasting damage to its reputation. The same logic applies to the TRUMP memecoin. “It would be very bad if this completely blew up in a lot of people’s faces because the media attention would be negative,” Bendiksen says.
Despite all the potential ramifications, Silverman says there’s no stopping Trump from testing the boundaries of what’s acceptable in crypto, 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 another crypto entrepreneur,” Silverman says. “He happens to be president.”
