In this sense, Jacob Silverman claims that he is " Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraudthe Trump Coin setup appears to have some of the characteristics of a “classic meme coin pump and dump,” where an issuer holds a large number of tokens, promotes the project, and then cashes out their holdings, thereby devaluing the project. "When you get 80% internal allocations, the risk of dumping it to the public or having some kind of major sell-off is huge. That's a huge red flag," Silverman claimed. "Unfortunately, some poor sap will get soaked." (Legal experts say pump-and-dump behavior falls somewhat of a legal gray area, but is roundly condemned as morally dubious.)
Melania Trump's decision to release her own meme coin appears to have hit Trump investors, even without any alleged potential pump-and-dump behavior. After the launch of the MELANIA coin, the price of the TRUMP token fell by 50%.
A long list of unofficial Trump-inspired meme coins — among them MAGA, MAGA Hat, Doland Tremp and Super Trump — also saw significant drops in value. During the 2024 election cycle, political memecoins are being used as a proxy for betting on election outcomes and expressing support for specific candidates, ebbing and flowing with events in the campaign. But Trump's launch inadvertently hit inventors who bought the unofficial coin to show support for Trump.
“I don’t think this is appropriate for the President of the United States,” Steven Steele, director of marketing for MAGA tokens, said in a video posted to ”
Silverman claimed that the Trump memecoin could be more dangerous than the financial damage it brings to supporters, and it could also become a new vehicle for bribery. He claimed that by investing large sums of money into a cryptocurrency in which Trump has a huge financial interest, thereby driving up its price, politically motivated actors could curry favor with the president without any direct transactions. "These are channels of reach and influence that we've never really seen before," Silverman claimed.
The release of Trump’s official meme coin marks the latest development in the president’s ongoing engagement with cryptocurrencies. Although Trump refused to consider Bitcoin a "fraud" during his first term, his attitude has completely changed in the run-up to the 2024 presidential election. Trump has begun positioning himself as the “crypto president” as crypto industry leaders endorse his presidency and donate hundreds of millions of dollars to pro-crypto super PACs.
In July, Trump addressed thousands of Bitcoin enthusiasts at a conference in Nashville, Tennessee, promising to turn the United States into the “crypto capital of the earth” and establish a national "Bitcoin Reserve". Then in September, the Trump family helped launch a new cryptocurrency business, World Liberty Financial, which they promoted as a way to "make finance great again." (It’s unclear what services World Free Finance will offer.)
World Liberty Financial has been met with skepticism by some members of the cryptocurrency industry, who fear the project could cost investors and cause lasting reputational damage if it fails. The same logic applies to Trump meme coins. "It would be really bad if this thing completely blew up in front of a lot of people because the media attention would be negative," Bendikson said.
However, Silverman said that despite all the potential consequences, there is nothing stopping Trump from testing the boundaries of what is acceptable for cryptocurrencies, as others have done before him. Especially as he prepares to overhaul the U.S. Securities and Exchange Commission (SEC), the financial regulator most aggressively promoting the cryptocurrency industry under the previous administration.
“In some ways, he’s just another cryptocurrency entrepreneur,” Silverman said. "He happens to be the president."