In this sense, claims Jacob Silverman, co-author of Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of FraudThe TRUMP coin setup appears to bear some of the hallmarks of a “classic memecoin pump-and-dump” – a maneuver whereby an issuer gets hold of large amounts of their coin, promotes the project, then owns cash in, and share the value of the coin and big losses with other investors. just massive. That’s a big red flag,” claims Silverman. “Unfortunately, some poor juices are going to get soaked.” (Pum-and-dumps occupy something of a legal gray area, say legal experts, but are roundly condemned as ethically dubious.)
Melania Trump’s decision to release her own memecoin already appears to have dealt a blow to TRUMP investors, even without any alleged potential pump-and-dump. After the MELANIA coin went live, the TRUMP token dropped by 50 percent.
The litany of unofficial Trump-inspired memecoins — including MAGA, MAGA Hat, Doland Tremp and Super Trump — also tumbled in value. During the 2024 election cycle, political memecoins were used as a proxy to bet on the outcome of the election and to express support for a particular candidate, rising and falling with events on the campaign trail. But the introduction of TRUMP inadvertently decimated inventors who bought unofficial coins as a sign of their support for Trump.
“I don’t think it’s appropriate for the president of the United States,” said Steven Steele, director of marketing for the MAGA token, in a video posted to X. “It just seems like a big money grab.”
Perhaps more dangerous than financial losses incurred by supporters, the Trump memecoin could also act as a new vector for bribery, Silverman claims. By investing large sums in a cryptocurrency in which Trump has a large financial stake, thus driving up its price, politically motivated actors can curry favor with the president without any kind of direct transaction taking place, he claims. “These are kind of channels for influence and leverage of a kind that we haven’t really seen before,” asserts Silverman.
The release of an official Trump memecoin marks the latest development in the president’s ongoing flirtation with crypto. Although Trump dismissed bitcoin as a “scam” in his first term, he performed a complete about-face in the run-up to the 2024 presidential election. As crypto industry stalwarts endorsed his presidency and poured hundreds of millions of dollars in donations into pro-crypto super political action committees, Trump began presenting 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 reserve” if it be re-elected. Then in September, the Trump family helped launch a new crypto venture, World Liberty Financial, which they pitched as a way to make finance good 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 cause lasting reputational damage should it fail. The same logic applies to the TRUMP memecoin. “If it completely blows up in many people’s faces, it will be very bad, because the media attention will be negative,” says Bendiksen.
Still, for all the potential consequences, there’s little stopping Trump from testing the boundaries of what’s acceptable with crypto, Silverman says, as others have done before him. Especially as he prepares to overhaul the SEC, the financial regulator that pursued the crypto industry most under the previous administration.
“In some ways, he’s just another crypto entrepreneur,” Silverman says. “He just happens to be the president.”