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In this sense, claims Jacob Silverman, coauthor of Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud, the TRUMP coin setup seems to bear some of the hallmarks of a “classic memecoin pump-and-dump”—a manoeuvre whereby an issuer keeps hold of large amounts of their coin, promotes the project, then cashes in their holdings, devaluing the coin and dealing huge losses to other investors.“When you have an insider distribution of 80 percent, the risk that it is going to be dumped on the public or that there will be some kind of major sell-off is just massive. It’s a huge red flag,” alleges Silverman. “Unfortunately, some poor saps are going to get soaked.” (Pump-and-dumps occupy something of a legal grey area, legal experts say, but are roundly condemned as ethically dubious.)
Melania Trump’s decision to release her own memecoin appears to have already dealt a blow to TRUMP investors, even absent any alleged potential pump-and-dump. After the MELANIA coin went live, the TRUMP token fell in price by 50 percent.
The litany of unofficial Trump-inspired memecoins—among them MAGA, MAGA Hat, Doland Tremp and Super Trump—have tumbled in value, too. During the 2024 election cycle, political memecoins were used as a proxy for betting on the outcome of the election and expressing support for a particular candidate, rising and falling with events on the campaign trail. But the launch of TRUMP has inadvertently decimated inventors who bought unofficial coins as a mark of their support for Trump.
“I do not think this is appropriate for the president of the United States,” says Steven Steele, marketing director for the MAGA token, in a video posted to X. “This just seems like an egregious money-grab.”
Perhaps more dangerous than financial losses brought upon supporters, the Trump memecoin could also act as a new vector for bribery, claims Silverman. By investing large sums into a cryptocurrency in which Trump has a large financial interest, thereby driving up its price, politically-motivated actors could curry favor with the president without any sort of direct transaction taking place, he alleges. “These are kinds of channels for influence and leverage of a kind we haven’t really seen before,” claims Silverman.
The release of an official Trump memecoin marks the latest development in the president’s ongoing flirtation with crypto. Though in his first term Trump rejected bitcoin as a “scam,” he performed a complete volte-face in the leadup to the 2024 presidential election. As crypto industry figureheads endorsed his presidency and threw hundreds of millions of dollars in donations at pro-crypto super political action committees, Trump began to pitch himself as the “crypto president.”
In July, speaking to thousands of bitcoiners at a conference in Nashville, Tennessee, Trump promised to turn the US into the “crypto capital of the planet” and establish a national “bitcoin stockpile” if reelected. Then in September, the Trump family helped to launch a new crypto business, World Liberty Financial, which they pitched as a way to “make finance great again.” (It remains unclear what services World Liberty Financial will provide.)
World Liberty Financial was met with skepticism by some members of the crypto industry, who worried that the project could lead to losses among investors and deal lasting reputational damage should it fail. The same logic applies to the TRUMP memecoin. “If this totally blows up in a lot of people’s faces, it will be super bad, because the media attention will be negative,” says Bendiksen.
Yet for all the potential consequences, there is little to prevent Trump from testing the boundaries of what is acceptable with crypto, says Silverman, as others have done before him. Particularly as he prepares to overhaul the SEC, the financial regulator which most energetically pursued the crypto industry under the previous administration.
“In some ways, he’s just another crypto entrepreneur,” says Silverman. “He just happens to be the president.”
