Trump's Cryptocurrency Goodwill Dented by Meme Coin Launch
Former President Donald Trump's support within the cryptocurrency industry has waned following the launch of meme coins by him and his wife. Critics decry these actions as an unseemly cash grab that undermines efforts to establish digital assets' legitimacy.
Despite feeling unfairly targeted by the Biden administration and investing heavily in Trump's campaign, the industry remains hopeful for the former President's assistance in integrating crypto into mainstream financial systems. Trump has promised a less burdensome regulatory approach and appointed pro-crypto officials to key government posts.
Since Trump's election, bitcoin and other cryptocurrencies have experienced significant growth. A lavish "Crypto Ball" held before Trump's inauguration sold tickets for exorbitant prices and featured Snoop Dogg's performance. However, the event's festive atmosphere was dampened when Trump announced the launch of his own meme coin on social media.
This move was met with disappointment by many in the crypto community. Tom Schmidt, a partner at crypto venture capital firm Dragonfly, expressed, "It felt cheap and grifty." Some crypto enthusiasts even joked about missing Gary Gensler, the former SEC Chairman perceived as the Biden administration's primary crypto antagonist due to the SEC's aggressive enforcement of crypto companies.
Meme coins occupy a volatile and unregulated fringe of the cryptocurrency market. Often starting as jokes devoid of intrinsic value, their prices can surge with sufficient public interest. Popular meme coins include Dogecoin and Fartcoin, and scammers frequently attempt to artificially inflate their prices before selling them to unsuspecting investors.
While some crypto enthusiasts welcomed the launch of the Trump meme coin, its price surged to over $70 due to eager buyers. The price plummeted on Sunday when First Lady Melania Trump announced her own meme coin, also experiencing an initial spike followed by a significant decline. Currently, Trump's meme coin trades around $45, while Melania's stands at approximately $4.
Trump appointed SEC Commissioner Mark Uyeda as the acting chief on Tuesday, who promptly announced the establishment of a crypto task force to guide the SEC toward a "sensible regulatory path." Trump has pledged to establish a U.S. bitcoin stockpile and implement industry-friendly regulations, facilitating crypto companies' access to the broader financial market.
However, some crypto proponents express concern that Trump's association with meme coins could hinder his ability to enact reforms. Nic Carter, a Trump supporter and partner at Castle Island Ventures, stated, "It does the opposite of validating us; it makes it look completely unserious."
CIC Digital, an affiliate of the Trump Organization, facilitated the sale of Trump meme coins. In promoting them, Trump urged supporters, "Have Fun!" The website selling the tokens clarifies that they are expressions of support rather than investment opportunities. According to the coin's website, 200 million Trump meme coins are currently in circulation, with plans to issue 1 billion over the next three years.
Trump's family business recently adopted an ethics agreement barring him from routine decision-making within the Trump Organization during his presidency and restricting the sharing of financial information about the business with him.
Trump and the First Lady were not the only individuals promoting new cryptocurrencies around the inauguration. Lorenzo Sewell, the Michigan pastor who delivered an impassioned inaugural invocation on Monday, announced the launch of a new coin bearing his name, intended for the benefit of his church.