US President Donald Trump has been criticized for launching a meme coin while he “doesn’t know much” about cryptocurrency.
A digital coin called TRUMP appeared on his social media accounts ahead of his inauguration on Monday and quickly became one of the most valuable cryptocurrencies. The price of the same coin rose to $75 in one day, but has since fallen to $39.
But the launch of the so-called meme-coin — a cryptocurrency with no utility other than entertainment or speculation — has been widely criticized by industry insiders.
“Trump’s comments about not knowing much about coins support my opinion that he’s making fun of the industry. It’s a stunt,” says Danny Scott, CEO of CoinCorner.
The latest price drop came after Trump told reporters: “I don’t know much about it other than I launched it, other than it was very successful.”
When he was told that his coin had raised several billion dollars for him, he pointed to the tech billionaires gathered for a press conference about AI, saying, “Several billions—that’s in “Peanuts are for boys.”
This is not the first time Trump has sold crypto products. He made millions in 2022 by launching a series of his NFTs in various superhero poses.
Some industry analysts say the president has his own coin of memes that others should follow.
“The TRUMP token has just signaled to every company, municipality, university and individual brand that crypto can now be used as a capital formation and customer bootstrapping mechanism,” Jeff Dorman from investment firm Arca wrote online. posted
However, overall sentiment toward the president’s memecoin appears to be negative.
Many in the crypto world are waiting for Trump to follow through on campaign promises to help boost the industry in America. People like Danny Scott hope to see plans from the administration focused specifically around bitcoin.
Last year, Trump promised Bitcoin enthusiasts that he would make the United States the “crypto capital of the planet.” A few days into his term, the president has not issued executive orders related to cryptocurrency, nor has he mentioned it in his speeches. is
According to the website CoinMarketCap, TRUMP Coin is now the 25th most valuable crypto coin with a value of around $8 billion.
Trump and the team behind him own 80% of the coins so in theory, they will make billions of dollars if they sell their shares and the price stays the same.
This setup is considered outdated by crypto researchers at K33 for similar tokens.
“There’s no sugarcoating this – these toconomics are terrible for a memecoin,” said David Zimmerman, an analyst at K33.
However, K33 analysts admit that the remaining 80% of coins cannot be traded in the open market so investors are partially protected from price shocks.
