Three days before taking the oath, President Donald Trump on Its own crypto assets: $TRUMP. On the eve of his inauguration, Trump had a stake in the so-called memecoin Value $58 billionMaking him, on paper, one of the richest men on the planet. While the price of Trump Memecoin has fallen from its peak, the dangers of the president’s anything-goes approach to crypto have never been more apparent.
Trump could use this crypto scheme to extract cash not only from his most loyal supporters but also from anyone. May wish to please His administration next month. Even many people in the crypto industry, Which helped get Trump electedalready talked about How deceitful and predatory Trump’s Memecoin project. Trump and friends own a vast majority of the new MemeCoin supply, which means that when they decide to sell their holdings, the price will drop, making Trump richer (in real terms) and Trump MemeCoin investors poorer. It has the makings of a classic Pump and dump scenario.
“I wouldn’t call it a scam,” said Omid Malekanis an associate professor at Columbia Business School. “Because to me, whenever someone calls something a scam, there’s an element of fraud. There is no cheating here.”
Indeed, all this is happening in plain sight. Trump’s MemeCoin Official websiteFeaturing the slogan “Celebrate our victory and have fun”, includes a schedule of when more “Trump memes” will be released. There’s also some fine print that makes it clear that CIC Digital LLC and Fight Fight Fight LLC, both Trump-affiliated entities, own 80 percent of the Memecoin supply. There is a link to the Terms of Service, which is over 5,000 words. So it is clear that lawyers were involved in all these setups.
Such a brazen scheme sends a chilling message to the country: In Trump’s crypto-first America, morality is no barrier to the pursuit of wealth. The theme carries echoes of previous crypto-based scams, including Sam Bankman-Fried’s Ponzi scheme, where single ambition earned rewards before results. Trump’s latest cash-grabbing recklessness is certainly a sign of things to come, as the president rolls back regulations on crypto that protect investors and give traditional banking some shelter from the chaos of the crypto industry. It won’t be long before the crypto market crashes again, and this time, it could bring the entire economy down with it.
If all this excitement makes you think about buying some memecoins, please don’t. A memecoin is a type of digital asset built on a cryptocurrency blockchain, but is not a full-featured cryptocurrency. Like Bitcoin. Memecoins are usually associated with a joke or a mascot, and while they can be bought and sold, memecoins Don’t power a crypto ecosystem like Ethereum That’s all but plausible, which makes the idea of Trump’s new memecoin worth several billion dollars even more absurd.
“I don’t give investment advice, but I always tell people, stay away from MemeCoin,” Malekan said. “If you’re going to play, think of it like casino money: invest the money you take with you to the casino to play craps.”
Unfortunately, Malekan added, many Trump supporters who bought MemeCoin are new to the crypto world. This means they don’t understand the risks involved in crypto investing or how the industry works. Around the same time as Trump’s launch, crypto wallet and trading platform apps, like Moonshot and Coinbase have risen to the top of Apple’s App Store Rankings Most seasoned crypto investors use these apps regularly, so there’s reason to believe the new downloads come from newcomers. It’s also telling that Trump is allowing people to buy his cryptocurrency with debit cards, while memecoins are usually traded for other cryptocurrencies, according to Molly White, a crypto researcher and Newsletter author required citation.
True believers will say that Trump is bringing more people into the crypto tent. If a Trump supporter hasn’t tried buying crypto for some reason, Trump is making it easier for them to get their money in the game. But it also means that potentially millions of Americans are betting on an asset that is inherently very risky and volatile. Bitcoin, by all measures the gold standard of cryptocurrency Incredibly restlessAnd the value can fluctuate by thousands of dollars in just a matter of hours. and when The Biden administration took steps to reign in the explosive growth of cryptoAll signs point to chaos in the future Trump is ready to roll back regulations which protects investors.
“The Trump administration has indicated that it wants to very quickly remove such firewalls between traditional finance and banking and the crypto industry,” White said. “We are looking at serious risks to the broader financial ecosystem that are unprecedented for the crypto world.”
It will take some time to unravel, but the Trump MemeCoin grift is already underway. First Lady Melania Trump Now Has Her Own MemeCoin Melaniawhich increased by about 50 percent then decreased in value. Even the pastor who delivered the eulogy at Trump’s inauguration, Lorenzo Sewell, launched a memecoin called $Lorenzo in an attempt to cash in. It was lost 93 percent of its value In less than a day.
And by the way, if it wasn’t already clear, memecoins are useless. These are not actual cryptocurrencies like Bitcoin, but rather something called a crypto token, which is built on top of an existing cryptocurrency’s blockchain. Anyone can launch a memecoinAnd it can be a way to raise money for a project or help someone. Buying and selling memecoins is also a hobby, like collecting baseball cards, but you can’t actually hold memecoins in your hands or even see them because they’re just a string of random numbers stored in a digital wallet.
Best in the world, memecoins are fun. First MemeCoin – Dogecoin –Started as a joke. Some software engineers created this digital currency in 2013 to poke fun at Bitcoin’s lofty, world-saving ambitions. They named it after a Shiba Inu dog named Kabosu “Dog” has become a meme A couple of years ago. Dogecoin currently has a market capitalization of around $53 billionAccording to CoinGecko. But Dogecoin is an actual cryptocurrency that you can use to buy and sell stuff.
Some would point to Dogecoin as a success story, giving a glimpse of a potentially positive future for Trump’s memecoin. In that fantasy, Trump supporters who bought presidential tokens would not only get their money back, they would hold onto those memecoins until they were rich beyond their wildest dreams. The irony here is that Dogecoin was created to satirize the idea that crypto could save the world or be a force for good.
Memecoins have always been a practical joke. Only this time, seen in a certain light, the fate of the American economy is the punchline. It’s possible that the best-case scenario is that Trump gets a lot richer. The worst case is much darker.
A version of this story also appeared in the Vox Technology Newsletter.Sign up hereSo you don’t miss the next one!
