Jacob Silverman, coauthor of Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud, asserts that the setup of TRUMP coin appears to exhibit characteristics typical of a “classic memecoin pump-and-dump.” This scheme involves an issuer retaining significant quantities of their coin, actively promoting the project, and subsequently liquidating their holdings, which depreciates the coin’s value and results in considerable losses for other investors. “When insider ownership reaches 80 percent, the possibility of a major sell-off or the coin being unloaded on the public is incredibly high. It raises a serious alarm,” claims Silverman. “Regrettably, some unfortunate individuals are going to be left in the lurch.” (While pump-and-dump schemes exist in a legal gray area, they are broadly viewed as ethically questionable, according to legal experts.)
The launch of Melania Trump’s own memecoin seems to have already impacted TRUMP investors negatively, even without any suspected pump-and-dump activities. Following the release of MELANIA coin, the value of TRUMP token plummeted by 50 percent.
A plethora of unofficial Trump-themed memecoins—including MAGA, MAGA Hat, Doland Tremp, and Super Trump—have also seen their values decline. During the 2024 election cycle, political memecoins served as a mechanism for wagering on election outcomes and showcasing support for designated candidates, with their values fluctuating alongside the events of the campaign trail. However, the introduction of TRUMP has unintentionally devastated backers who invested in unofficial coins as an expression of their Trump support.
“This is not suitable for the president of the United States,” states Steven Steele, marketing director for the MAGA token, in a video shared on X. “It appears to be a blatant attempt to generate profit.”
Beyond the financial repercussions for supporters, the Trump memecoin may pose an additional risk as a potential avenue for bribery, suggests Silverman. By pouring significant amounts into a cryptocurrency where Trump has considerable financial stakes, thereby elevating its value, politically motivated individuals could garner favor with the president without any overt transactions occurring, he posits. “These are types of channels for influence and leverage that we have not encountered previously,” asserts Silverman.
The unveiling of an official Trump memecoin signifies the latest twist in the president’s ongoing engagement with cryptocurrency. Despite having dismissed bitcoin as a “scam” during his first term, Trump has completely reversed his stance in the lead-up to the 2024 presidential race. As crypto industry leaders have endorsed his presidency and contributed hundreds of millions of dollars to pro-crypto super PACs, Trump has positioned himself as the “crypto president.”
In July, addressing thousands of bitcoin enthusiasts at a conference in Nashville, Tennessee, Trump pledged to transform the US into the “crypto capital of the planet” and to create a national “bitcoin stockpile” if he is re-elected. Then, in September, the Trump family helped launch a new cryptocurrency venture, World Liberty Financial, which they promoted as an initiative to “make finance great again.” (The specific services World Liberty Financial will offer remain unclear.)
World Liberty Financial faced skepticism from some in the crypto community, who worried that the venture could result in investor losses and cause long-term reputational harm if it fails. The same concerns apply to the TRUMP memecoin. “If this ends badly for a significant number of people, the negative media coverage will be devastating,” says Bendiksen.
Yet, despite the possible ramifications, there is little to hinder Trump from pushing the limits of what is deemed acceptable in the crypto sphere, according to Silverman, as others have previously done. Especially as he prepares to revamp the SEC, the financial regulatory body that vigorously pursued the crypto sector under the last administration.
“In many respects, he’s just another crypto entrepreneur,” reflects Silverman. “He merely happens to hold the office of president.”
