President Donald Trump’s anticipated return to the White House has sparked optimism among cryptocurrency enthusiasts. During his campaign, he made various promises aimed at supporting the crypto sector and recently made headlines by launching his own “meme coin” just before his inauguration. The Trump token initially soared to an impressive valuation of nearly $15 billion, although it has since experienced a significant decline. This situation raises critical questions about the implications of a high-ranking official creating such an investment vehicle, as well as the nature of meme coins themselves. Marketplace’s Meghan McCarty Carino engaged with Axios reporter Brady Dale, who authors the Axios Crypto newsletter, to delve deeper into these matters. Below is an edited version of their discussion.
Understanding Meme Coins
Brady Dale explained that meme coins are primarily speculative assets, often likened to a game. These cryptocurrencies often embody a specific idea, with Dogecoin being the most recognizable example featuring the popular Shiba Inu dog. Recently, the Solana blockchain has gained traction for its quick and cost-effective transactions, leading to the emergence of an app called pump.fun that allows for the rapid creation of new meme coins—thousands of which are generated daily. Investors engage in this environment by assessing which coins represent the most amusing or catchy concepts, betting on their potential popularity. Generally, these coins have short lifespans, but the excitement comes from the challenge of predicting which will capture public interest. Given the current landscape of cryptocurrency, where Bitcoin’s performance has been relatively stagnant, people are turning to meme coins for entertainment and engagement.
The Launch of Trump’s Meme Coin
The conversation turned to the launch of President Trump’s meme coin, which took place the weekend before his inauguration. Dale noted that the token experienced an explosive initial success, with some investors reaping substantial profits, while others saw modest gains or losses. Although its value has decreased from its peak, Dale categorized this coin as a “celebrity meme coin,” which tend to have better longevity because the backing celebrity—especially someone as influential as a sitting president—can generate sustained interest. If Trump were to endorse the coin during his rallies or make special announcements about it, that could further enhance its visibility and market presence. However, there’s uncertainty about whether he will continue to promote it.
The Celebrity Coin Phenomenon
Dale elaborated on the trend of celebrity coins, noting that the involvement of celebrities in the crypto space has often been problematic. Typically, these endorsements come from lesser-known figures, making it difficult for such projects to maintain lasting interest. In contrast, President Trump possesses a unique ability to galvanize attention, which could differentiate his coin from others in the market. However, Dale expressed skepticism about its long-term prospects.
New Investors and Market Dynamics
Interestingly, many individuals who purchased the Trump meme coin were relatively new to the cryptocurrency world. The launch app, Moonshot, reportedly onboarded 400,000 users, many of whom had never interacted with blockchain technology before. The coin’s association with Trump may have led some to believe that it would quickly rise in value, giving them a sense of legitimacy about investing in cryptocurrency. Although there was anticipation that Trump would promote the coin during his inauguration, he did not mention it, leading to speculation about the extent of his involvement in its creation.
Reactions from the Crypto Community
Responses from the crypto community have been mixed. Seasoned crypto enthusiasts have expressed concern that the president’s foray into cryptocurrency may undermine his authority regarding pro-crypto regulation. Conversely, newer participants, including co-founders of the pump.fun platform that popularized meme coins, view the launch of Trumpcoin as a positive development for their sector and the Solana blockchain. However, the initial excitement surrounding Trumpcoin seems to have waned, with little follow-up engagement from the Trump camp, leaving many investors feeling disillusioned about the venture’s potential.
Potential Uses and Speculation
For now, investors can primarily speculate on the price movements of these coins. The Trump Organization could potentially introduce additional functions for the token, but at this stage, its utility remains limited to speculation. It’s worth noting that this isn’t the first meme coin associated with Trump; various unofficial Trump-themed coins have circulated during the election cycle. These coins often mirrored polling data and political news, with their values fluctuating based on Trump’s political fortunes. As the market evolves, investors may continue to buy into these coins, anticipating price movements in direct response to Trump’s actions and significant news events during his presidency.
Future Developments in Crypto Regulation
On the regulatory front, Trump has already formed a group that aims to explore, among other initiatives, the establishment of a national cryptocurrency reserve, potentially utilizing assets seized by the federal government. In addition, Trump Media, the parent company of the social media platform Truth Social—majority-owned by Trump—recently announced plans to launch its own financial services, including investment options such as exchange-traded funds and cryptocurrencies. In the meantime, several e-commerce platforms have begun accepting the Trump meme coin as payment, allowing consumers to purchase a variety of Trump-branded merchandise, from watches to fragrances, using the token.
