US President Donald Trump has come under fire for launching a currency meme, saying he “doesn’t know much” about cryptocurrency.
The digital currency called TRUMP appeared on his social media accounts ahead of his inauguration on Monday and quickly became one of the most valuable cryptocurrencies. The value of a single coin reached $75 in one day, but has since fallen to $39.
But the launch of the so-called meme-coin – a cryptocurrency with no other purpose than for entertainment or speculation – has been widely criticized by industry insiders.
“Trump’s comments about not knowing much about the coin support my opinion that he is mocking the industry. It’s a stunt,” says Danny Scott, CEO of CoinCorner.
The latest decline came after Trump told reporters, “I don’t know much about it other than I started it, other than it was very successful.”
When told his coin raised several billion dollars for him, he downplayed it by saying “a few billion – that’s peanuts for these guys,” referring to the tech billionaires gathered for a press conference about AI.
Meme-coins are often used by speculators to make money or to allow fans to show support for a celebrity or moment in internet culture.
It’s not the first time Trump has sold crypto products. He made millions by launching a series of his NFTs in various superhero poses in 2022.
Some industry analysts say the president having his own meme currency is a sign others should follow.
“The TRUMP token just signaled to every company, municipality, university, and individual brand that crypto can now be used as a mechanism for capital formation and crowdfunding,” Jeff Dorman of investment firm Arca posted online.
However, overall sentiment appears to be negative towards the president’s coin meme.
Many in the crypto world are expecting Trump to follow through on campaign promises to help grow the industry in the US. People like Danny Scott hope to see focused plans, especially around Bitcoin, from the administration.
Last year Trump promised Bitcoin fans that he would make the US “the crypto capital of the planet”. Days into his term, the president hasn’t issued any executive orders related to cryptocurrencies, nor has he mentioned it in his speeches.
The TRUMP coin is now the 25th most valuable cryptocurrency with a value of around $8 billion, according to the website CoinMarketCap.
Trump and the team behind him own 80% of the coins, so, in theory, they would make billions of dollars if they sold their shares and the price stayed the same.
This setup has been described by crypto researchers at K33 as outdated for similar tokens.
“There’s no sugarcoating it — these tokenomics are terrible for a meme coin,” said David Zimmerman, an analyst at K33.
However, K33 analysts admit that the remaining 80% of coins cannot be dumped on the open market, so investors are partially protected from price shocks.
There are thousands of cryptocurrency coins and anyone can create one.
First Lady Melania Trump launched her own meme coin on the eve of the inauguration, which is now worth $700 million since falling from $13 a coin to $2.70.
But many meme-coins have led to huge losses for people who invest in them.
Dan Hughes, of crypto firm Radix, thinks the president and his wife’s meme coin mining undermines the positive aspects of the industry.
“This pattern of celebrity-driven token launches, particularly political figures, potentially marks a worrying trend in crypto markets where influence and manipulation of liquidity can obscure underlying value creation,” he said.
Others in the cryptocurrency world think that mining meme-coins to make money is degrading.
“The introduction of these coins during the presidential inauguration raises concerns about potential conflicts of interest and could undermine the dignity of the president and first lady,” said Grzegorz Drozdz, market analyst at investment firm Conotoxia.