Trump's launch of his own memecoin, $TRUMP, a cryptocurrency with no real value that traders can invest in, has caused alarm among investors and representatives of the cryptocurrency industry in Washington, D.C., Politico reports.
"It’s absolutely preposterous that he would do this," said Nic Carter, a founding partner of the crypto investment company Castle Island Ventures, who calls himself a "avowed and explicit" Trump supporter. "They’re plumbing new depths of idiocy with the memecoin launch."
Memecoins - a class of cryptocurrencies sometimes referred to as "shitcoins" that includes digital assets with names like Dogecoin and Fartcoin - are speculative assets that are inherently highly volatile. If investors lose money on the coin, it could become a liability for both Trump and the entire crypto sector.
At the same time, the new product is also a clear signal that Trump and his family are ready to take advantage of new business opportunities, even while in office. His eldest sons, Donald Trump Jr. and Eric Trump, are currently creating their own cryptocurrency company, World Liberty Financial, which raised concerns among crypto advocates like Carter during the election campaign.
"It’s awful," said one Washington lobbyist, who wished to remain anonymous in order to speak frankly about the sensitive dynamics in the sector. "This is a horrible look for the industry already trying to make the case that we’re not a bunch of hucksters, scammers and fraudsters."
The coin has already become a target for Democrats. Rep. Sean Casten, a critic of cryptocurrencies on the House Financial Services Committee, said that Trump "continues to make clear he will not let detriments to his supporters or ethics stand in the way of enriching himself."
Trump's memecoin has soared since its debut late Friday night. At its peak, the token rose to $74.19, and according to Coingecko, it now ranks 21st among all cryptocurrencies in terms of market capitalization, which has reached $11.6 billion. And major cryptocurrency exchanges such as Coinbase and Binance have begun to add the $TRUMP token to their platforms. Kraken, another major cryptocurrency trading platform, added Trump's memecoin for trading on Saturday afternoon.
Demand for Trump memecoins accelerated on Sunday when Melania Trump announced her own memecoin on social media called MELANIA. Shortly afterward, Trump's token fell in price and is currently trading at $56.8.
Nick Carter believes that because of Trump, this token may last longer than others. On the stock market, shares of the president-elect's social media company, Trump Media & Technology Group, also rose, despite questions about the future prospects of the parent company, Truth Social. But "at the end of the day," Carter added, "there's no fundamental basis to this thing."
"It’s going to bite a lot of people in the ass — including people who believe in crypto," said about Trump's memecoin a representative of the financial industry, who wished to remain anonymous because he was not authorized to speak publicly. "But nothing ever seems to hurt him."