Donald and Melania Trump arrive at the Commander in Chief Ball in Washington, DC on Monday.
The creation of billions of dollars in digital wealth for the Trump Organization began Friday with a social media post.
At 9:44 PM ET, then-President-elect announced the creation of a new digital token: $TRUMP.
“My NEW official Trump meme is HERE! It’s time to celebrate everything we stand for: WINNING!” Donald Trump’s X account has been posted. “Join my very special Trump community. GET YOUR $TRUMP NOW. Go to http://gettrumpmemes.com – Have fun!”
The announcement came with little fanfare. But what would happen in the coming days — including wild price swings and Melania Trump’s own digital token — would roil the crypto community, including some Trump supporters, just as he was set to return to the Oval Office.
The $TRUMP and $MELANIA tokens, as they are called on social media, belong to the crypto category known as memecoins: digital assets that use blockchain technology similar to bitcoin.
Since there are no assets like the underlying cash flows that back memecoins like $TRUMP and $MELANIA, anyone who owns them will only make money if they sell them at a higher price than they bought them for.
That includes the coin makers – and Trump and his family – themselves.
While memecoins have long been part of the crypto universe, they have seen a resurgence in recent months after Trump emerged victorious in November and promised to embrace blockchain technology and crypto markets.
In the case of $TRUMP and $MELANIA, the coins were launched on Solana, a blockchain that collects fees to process transactions and is known for its faster throughput, meaning it is less likely to crash when transaction volumes are high. It is not clear who was aware of their launch before it took place, aside from the developers of the coins and the Trump Organization.
The many recent launches of memecoins have led to new skepticism and warnings about scams due to the free nature of memecoins. Because they are not formal investment vehicles, they are almost completely unregulated, and anyone can start one under any name at any time, often for free. Platforms like CoinMarketCap that track digital tokens showed dozens of duplicate TRUMP coins.
Bloomberg News summarized the sale of memecoins as “the crystallization of ‘greater fools’ investing, of an asset that is only worth what someone else is willing to pay for it at a given point in time.”
“I’m not sure people fully understand how much of the crypto world is reacting to the Trump memecoin launches,” Molly White, a software engineer and cryptocurrency chronicler, posted on X alongside screenshots of reactions that ranged from frustration to anger.
White later told NBC News that the launch of the coins appeared to dash hopes among some that Trump would help further legitimize the crypto industry.
“There is now a fear that people who are not very familiar with this industry will see it as a cash grab and not see all the good uses of crypto that exist,” she said. “They are afraid that this will give crypto a bad name.”
Some of that frustration has centered on Trump’s recent emergence as a champion for all things crypto. During his 2024 presidential campaign, Trump made his support for crypto clear. Speaking at the annual Bitcoin conference, he pledged to consider creating a “strategic bitcoin reserve,” which would allow the US to buy billions in cryptocurrency in an effort to encourage price support. and adoption. Trump has also launched a series of NFTs, and his family launched a crypto banking platform last year.
And Trump’s memecoin initially seemed to be a great success. The price of $TRUMP rose almost immediately, and by Saturday morning a single coin was trading at $75 – an increase of at least 650% from Friday’s launch price. Crypto enthusiasts who track transactions — many blockchains, including $TRUMP’s, are public — reported that some early purchasers held the token worth millions of dollars.
A spokesperson for the Trump transition team did not immediately respond to a request for comment.
The $TRUMP surge suddenly reversed when a new coin arrived on the scene – from Trump’s own wife.
On Sunday afternoon, Melania Trump’s X account posted that her $MELANIA memecoin was live. Donald Trump’s X account reposted that message.
The price of $TRUMP immediately plummeted upon the appearance of $MELANIA, with some suggesting that demand for one would increase interest in the other.
“$MELANIA coin is seen as a competitor to $TRUMP coin,” market commentary group The Kobeissi Letter wrote about X. “This has resulted in a sharp decline in demand for $TRUMP.”
Later on Sunday, a $BARRON coin also began trading, further fueling market concerns. However, $BARRON’s possible connection to Trump’s youngest son, Barron, or the Trump family was not clear. None of Trump’s official social media accounts have posted about it.
When the price of $TRUMP started to fall, a backlash ensued.
“Dear @realDonaldTrump: Please fire whoever recommended moving forward with Melania’s launch today,” Ryan Selkis, a longtime crypto advocate and political conservative, wrote on X on Sunday as the price of $TRUMP began to fall. “1. They don’t know what they’re doing. 2. They cost you a lot of $ and goodwill. 3. They don’t have your best interests in mind.”
As of Tuesday, the price of $TRUMP had not yet recovered from the decline. Yet, according to crypto news website CoinDesk, the combined assets of the Trump- and Melania-related companies that launched the coins were worth, at least on paper, tens of billions — and possibly even more — shortly after Trump was sworn in, according to crypto news website CoinDesk.
Because the wallets of all holders, including those of Trump and the coin’s creators, are visible on the blockchain, all transactions involving them will be closely monitored. And a big sell-off of those wallets would likely cause a big price drop, according to Ari Redbord, head of legal and government affairs at TRM Labs, a company that monitors crypto projects.
But Redbord said Trump’s celebrity adds a factor worth watching.
“It’s clear that Trump, because of who he is, is taking a memecoin launch to a higher level than we’ve ever seen before,” he said.
Trump has released a voluntary ethics document intended to prevent private financial interests from shaping his official policy agenda.
But the president’s involvement in the crypto project also raises questions about possible use by illegal actors or foreign governments, Redbord said.
Consumers should realize that memecoins offer “much less” protection than traditional stocks, he said.
“It’s very volatile,” Redbord added, saying: “Consumers really need to understand what they’re investing in because you’re going to lose a lot and potentially gain a lot.”
Mark Cuban, a tech investor and staunch Trump critic who has also been involved in crypto, warned on
“Hello any scam targeting anyone and everyone who has no idea about crypto,” Cuban said Monday on X about the coins. “Goodbye, whatever hope the crypto industry had of legitimizing itself.”
This article was originally published on NBCNews.com