Former president of the United States, Donald Trump, has been a pretty big deal lately. He released his cryptocurrency, TRUMP coin, a few days before being inaugurated into his second term in office. Yet, this new endeavor has raised eyebrows and raised questions about the meaning of political actors jumping into the cryptocurrency waters. It has done much to supercharge Trump’s financial advantage. The Trump family controls a significant 60 percent share of World Liberty Financial, the corporation which is the basis for this cryptocurrency endeavor.
The decision to release TRUMP coin has been met with skepticism, especially in light of Trump’s history of denouncing digital currencies. Just a reminder that back in 2021, this very guy called bitcoin a scam and called for heavy-handed regulation. His recent actions indicate a dramatic change in attitude.
The Mechanics of TRUMP Coin
TRUMP coin is part of the new class of meme coins. These so-called meme cryptocurrencies are meant to cash in on trends of popular culture and celebrity. As its name immediately implies, it’s explicitly linked to Donald Trump. According to the press release announcing the move, as laid out by Trump himself, “My new official Trump meme is here. At the launch, roughly 20% of the entire supply of TrumpCoins was released to market. Notably, this groundbreaking release was worth an incredible $14 billion.
This immediate valuation highlights the market’s enthusiasm for the coin, with its initial worth representing about 89 percent of Trump’s net worth at that time. A family justice organization holds onto 80 percent of the TrumpCoins. This enormous conflict of interest poses severe ethical implications if a sitting president undertakes such a venture for their own personal profit.
“The following day, the coins that were released into circulation, which Joel reported was around 20 percent of the coins to start, were worth $14 billion. Let’s just sit with that for a second. An incoming president of the United States launched an online cryptocurrency scheme days before taking office that boosted his own net worth significantly.” – Lauren Goode
The TRUMP coin architecture additionally provide unique access for the top 220 currency holders. While a welcome addition, this design powerfully illustrates the selective nature of this exceptional financial boon. This lack of transparency at the very least undermines equal access to participation in what seems to be a fast emerging marketplace.
Political Repercussions
Between public political ethics and future regulation of cryptocurrencies, the implications of this cryptocurrency venture go well beyond the political wallet. Congressional reactions have been mixed, with some expressing concern over the potential for corruption when political leaders engage in financial schemes. As Michael Calore remarked on our Policycast earlier this week, there has been some surprising bipartisan political response to this. Congress, surprisingly, is starting to get a little worried too.
Critics have pointed out that letting high-ranking political officials use political power to promote and profit off of cryptocurrencies would be a dangerous first. Elizabeth Warren commented on the situation by stating, “The Genius Act makes this kind of corruption worse. There is nothing in this bill to stop it. Instead, the bill would accelerate it.” These kinds of sentiments are indicative of a burgeoning concern over the relationship between a highly politicized environment and new financial technologies.
In addition, critics from within the industry have pointed to the optics of Trump’s cryptocurrency dealings. Commenting on the announcement, one well-placed source noted that selling your own coin is terrible optics for a business. In comparison, earning profits through market making is murky enough to leave your good name at risk. This populist impulse foreshadows the danger lurking when private self-interest meets public accountability.
Market Dynamics and Future Prospects
As TRUMP coin starts circulating in the market, trading analysts are closely watching its performance and potential volatility. Dangerous volatility The early frenzy that has characterized many meme coins has been accompanied by severe volatility, which can be dangerous for investors. Katie Drummond articulated the speculative nature of these kind of investments with this dramatic flourish, “Oh, my God. Can you imagine.”
The cryptocurrency landscape is, by nature, unpredictable and ever-changing—influenced both by inside market factors and wider trending topics and events. Speculative by nature, industry experts urge investors to exercise extreme caution when investing in meme coins. Lauren Goode humorously advised potential investors with a playful suggestion: “Buy the UV coin, the Uncanny Valley coin.”
Yet even with these warnings, the siren’s call of making a buck on all things shiny and new—including TRUMP coin—just proves too enticing. As cryptocurrency continues to grow and break new ground, its crossroads with the political will be a topic of strife for the foreseeable future.
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