Did Trump's Meme Coin Put The Future Of Crypto At Risk?

The crypto industry had never seen support from someone as powerful as the U.S. President. Addressing the World Economic Forum in Davos, Switzerland, President Donald Trump declared his intention to make the United States the ‘world capital of artificial intelligence and crypto.’ This commitment appeared to be not just in words but backed by some actions, such as appointing crypto-friendly officials to key roles and creating a crypto task force to establish clear regulations—raising high expectations. Adding to this, Trump sent a strong financial signal with a $47 million purchase of Bitcoin and Ethereum through his World Liberty Financial to mark his inauguration, amassing a total crypto portfolio valued at over $360 million. However, the recent launch of his and his wife's highly volatile and utility-less meme coins made the hearts of many in the industry sink and raised questions about potential conflicts of interest. Some even called it a slap in the face to those working hard to build real products in crypto and to an industry as a whole that had spent heavily to help Trump win. Are those hopes truly lost, or does the crypto market still have a bright future ahead? As the saying goes, hope dies last—so let's explore.

The Controversial Journey of the $TRUMP Coin

The meme coin called $TRUMP appeared on Donald Trump's social media accounts ahead of his inauguration and quickly surged to become one of the most valuable cryptocurrencies. The price of a single $TRUMP token skyrocketed to $75.35. However, it sharply declined after the launch of $MELANIA coin, and as of this writing, $TRUMP trades at $34 with a market cap of $6.91 billion, according to CoinMarketCap.

A Magnet for Scammers

As with many high-profile crypto launches, the $TRUMP token became a prime target for opportunists and scammers. According to Blockaid's report, scammers wasted no time exploiting the buzz.

On the day of the $TRUMP launch, the number of tokens bearing the "Trump" name skyrocketed by 206%, with over 6,800 new tokens deployed. Many were malicious, designed to mimic the official $TRUMP token and lure unsuspecting investors.

The day after the launch, fake decentralized applications (dApps) using Trump's name increased by 14x, with 91 impersonator dApps launched within 24 hours.

The schemes didn't stop at $TRUMP. Tokens bearing metadata linked to other Trump family members, such as "Melania" and "Barron," surged by 592%, creating an illusion of an interconnected ecosystem to manipulate investors.

Blockchain Transparency Exploitation

Blockchain transparency which allows anyone to send tokens to any wallet also facilitated speculative and opportunistic behavior. These wallets, presumably belonging to team members, market makers, or liquidity providers, became prime targets for opportunists who sent newly minted tokens to these addresses.

For instance, one wallet received 4 million $TRUMP tokens equivalent to $135.89 million at the current price. The sender is the crater of Milei (JMILEI) token. Solscan reveals how Milei was quickly sold with high trading activity during the initial pump.

Source: Solscan.io

Other wallet with substantial $TRUMP holdings is currently flooded with over 500 different coins, including the X token.

Source: Solscan.io

Following the Trump coin launch, the X token also experienced significant trading activity, with transactions reaching a total volume of $698K in the past 24 hours. At a current price of $0.009623, some tokens were sold at their peak during the post-Trump pump, generating impressive returns. The market cap of X token now stands at $9.5M, with 3,141 recorded transactions and an evenly distributed buy and sell volume of $349K each.

Source: Dexscreener.com

The sale of $TRUMP meme coins was organized by CIC Digital LLC, an affiliate of the Trump Organization. According to the official website, these tokens are marketed as "expressions of support" rather than investment opportunities, and they include a disclaimer specifying that they are not intended to be securities or investments of any kind. The site also states that 200 million $TRUMP coins are currently available, with plans to issue a total of 1 billion tokens over a three-year period. Notably, CIC Digital LLC and Fight Fight Fight LLC collectively hold 80% of the token supply, subject to a three-year unlocking schedule, and will receive revenue from trading activities.

Source: GetTrumpMemes.com

At a January 21 press conference, Trump appeared to downplay his role in the project, saying, "I don't know much about it other than I launched. I hear it's very successful but I haven't checked." 

Ethics, Skepticism and the Role of World Liberty Financial 

Experts and the community have been crying out against the private financial interests of the president shaping policy, thus undermining the legitimacy and the credibility the industry has been struggling to achieve.

The Trump family business recently released a voluntary ethics white paper stating that Donald Trump "will not sit on or be appointed to any boards or other official corporate positions" and "will have no role in any of the day-to-day decision making" at the Trump Organization during his second term in office. The document also specifies limits on the financial information that will be shared with him, stating he will receive only "general business updates" and "not an accounting of the performance of any specific business or asset". 

Beyond being an ‘expression of support,’ skeptics have asserted that this highly speculative crypto project is merely a short-term cash grab, similar to Trump's other initiatives, such as the NFT trading cards he launched in 2022, which earned him millions according to financial disclosure documents. Also, with 80% of the supply controlled by entities affiliated with the Trump family, questions arise about whether this could lead to price manipulation or unfair market practices. 

This skepticism extends to World Liberty Financial, a crypto company partly owned by the U.S. president, his three sons and one of his top advisors, holds a total portfolio valued at approximately $362.45 million, distributed across various cryptocurrencies. According to Arkham, the largest holdings are in Ethereum (56.703K ETH, $186.78 million), followed by Wrapped Bitcoin (551.717 WBTC, $58.53 million) and USD Coin (46.237M USDC, $46.24 million). Other significant assets include Staked Ether (10.002K STETH, $32.8 million), Tether (10.513 million USDT, $10.51 million), and Wrapped TRON (30.107 million TRX, $7.59 million). Smaller holdings consist of Chainlink (256.315K LINK, $6.68 million) and AAVE (19.399K AAVE, $6.66 million). 

Source: Arkham  

However, supporters counter that the ethics agreement provides sufficient safeguards to address these concerns by limiting Trump's direct involvement. They also note that crypto is inherently a decentralized and transparent system, so any direct manipulation would be highly visible. Furthermore, they argue that World Liberty Financial’s portfolio of assets like stablecoins and high-value tokens is a testament to the organization’s legitimate investment strategy rather than a speculative gamble.

Conclusion 

The delivery of Trump's crypto promises remains to be seen, but his "I don't know" involvement with meme coins seems entirely in line with his character as a rainmaker, someone with an undeniable knack for making money. Naturally, the crypto community didn't anticipate Trump to so openly embrace some of the ecosystem’s controversial aspects to make a fortune for his family. Focusing on the essentials, this definitely brought all eyes on crypto and attracted an even greater wave of newcomers. So, who knows? Perhaps crypto’s moment in the sun has finally arrived.