How TRUMP and MELANIA's Tokens Stirred Controversy in the Crypto World

The cryptocurrencies launched by US President Donald Trump and First Lady Melania over the weekend have divided the crypto community, with some saying they reinforce the negative image associated with the sector.

Trump's launch of the $TRUMP token and the $MELANIA token shortly before his inauguration created new conflict-of-interest concerns, experts said.

The two tokens have added billions of dollars in quick gains to Trump-linked entities, as Trump is reportedly planning to issue an executive order designating the asset class a national priority.

Meme coins, which are dominated by satirical tokens such as Doge coin, are highly volatile cryptocurrencies with little intrinsic value. While they can generate huge profits if they capture the attention of social media users, they are also prone to deterioration just as quickly.

Stunning Jump

US President Donald Trump surprised the crypto community on Friday when he announced the launch of his own crypto, called $TRUMP.

The launch was one of the most successful in history, with the Trump token rising from just a few cents to $33.87 in less than 24 hours, a staggering 18,000% jump, according to Fox Business.

The token rose to $72.51 shortly after its launch, with a market value of $14.74 billion, before falling to $33, giving it a market value of $6.77 billion, according to CoinMarketCap, a real-time crypto price tracker.

Analysts attributed the decline to some of the attention being paid to Melania's token, which also fell 80% from $13 to $2.77, with a market value of around $415 million.

The meme coins contributed to a surge in the Trumps' net worth, which now stands at $58 billion. 

The new meme coins have cemented the Trump family’s connection to an industry that his administration will play a key role in regulating.

The token is being touted as Trump’s only official currency, and its website urges buyers to own a piece of history.

Companies linked to the Trump Organization, such as CIC Digital and Fight Fight Fight LLC, control 80% of the $TRUMP token, potentially opening up the possibility of selling those shares for huge profits while ordinary investors face huge losses.

“While meme coins come and go, a token directly associated with the president probably has more staying power than most,” said Gautam Chhugani, an analyst at Bernstein, of CIC Digital and its holdings of the $Trump token.

Widespread Criticism

The launch of two meme coins by Trump and his wife, Melania, has drawn widespread criticism, particularly from crypto executives who had been waiting for the Republican president’s new administration to take a more serious approach to the crypto assets sector.

While Trump’s latest venture into crypto has spurred speculation, some executives say it has done more harm than good to an industry struggling to rebuild its reputation.

The new meme coins also drew immediate criticism from government watchdogs, considering it as the latest breach of ethical standards by the president-elect and a way to exploit his position on the world stage for profit.

Balaji Srinivasan, a former Coinbase executive, described the deal as a zero-sum lottery, saying: “After an initial spike, the price eventually crashes and the last buyers lose everything.”

Gabor Gurbacs, founder of PointsVille, said the meme coins cost the US, the presidency and his family a lot of credibility and the consequences haven’t even started.

He wrote in a post on X that the consequences of the launch of the two meme coins have not yet begun to be seen, and called on Trump to fire his crypto advisors.

Anthony Scaramucci, founder of SkyBridge Capital and a former Trump associate, has warned that retail investors could face significant challenges in dealing with cryptocurrencies due to their high volatility, describing what happened as corruption on a dictatorial level.

Investor Ari Paul called it a scam to steal billions of dollars from people.

Rob Hadick, general partner at venture capital firm Dragonfly Capital, said Trump coins are now a blight that we as creators must work to eradicate.

Senator Elizabeth Warren and Rep. Jake Auchincloss have sent a letter to several U.S. federal agencies calling for an urgent investigation into the meme coins launched in the name of former US President Donald Trump and his wife, Melania.

They warned that these meme coins could be used to increase Trump’s wealth in a suspicious manner, especially since anyone in the world, including leaders of hostile countries, could buy these currencies with the aim of influencing American politics.

Trump’s Recommendations

Trump used to be skeptical of the crypto sector, but he changed his position after the sector pumped huge sums of money into his election campaign.

Crypto companies spent $10 million on Trump’s inauguration, according to Politico.

Trump’s previous attempts in the crypto sector have included lucrative collections of non-fungible tokens (NFTs) and digital memorabilia featuring him in a variety of poses and outfits.

Trump and his sons also backed World Liberty Financial, a project that has received much media hype, but many details have not been revealed yet.

During his campaign, Trump pledged to streamline regulations, appoint crypto-friendly figures to oversee the industry, and create a national Bitcoin reserve.

He has already delivered on some of these promises, such as appointing several crypto-friendly agency heads, such as David Sachs, and is currently planning to make the United States the global crypto asset hub.

In his latest move, Trump signed executive orders on the crypto world that include the creation of a task force to advise the White House on crypto asset policies, involving key federal agencies such as the Treasury Department and the Justice Department.

The team will be tasked with reporting back to the president in about six months with recommendations for a regulatory framework and legislative proposals.

However, the move has been met with mixed reactions in the crypto community.

Bitcoin advocates have expressed disappointment that the largest crypto will not be the basis of the national reserve, as many had speculated.

Zaheer Ebtikar, founder of crypto fund Split Capital, commented on the gap between market hopes and the reality of the executive order.

“If you think about it, even buying one Bitcoin by the US government will be extremely reflective because all other governments will follow and buy it,” he said.

Potential Risks

The meme coin market is known for its extreme volatility and unstable prices, with the coins often experiencing sharp drops in value. Additionally, the sector has been linked to scams and manipulation.

“This meme coin represents the worst of crypto,” said Maxine Waters, Democratic congresswoman and member of the US House Financial Services Committee.

“Some in the crypto world are reacting with horror,” said crypto skeptic Molly White.

“While they hoped Trump's administration would be crypto-friendly, they didn't anticipate the Trump family would embrace some of the ecosystem's worst aspects to enrich themselves,” he added.

Kevin Boon, president of Mysten Labs, warned of the potential risks, saying: “Despite the entertainment aspect, people can lose a lot of money.”

He also noted that these coins could bolster opposition from some lawmakers in Congress who object to giving any legitimacy to this technology.

He argued that meme coins contribute to the simplification of the entire sector into a high-risk speculative trade.

Mike Cahill, chief of blockchain firm Douro Labs, noted that meme coins highlight the recreational and experimental nature of the crypto community, noting that images of cats, dogs, and even presidents have become financial power.

For example, the year 2024 ended with a coin meme-related scandal, when 22-year-old American Hailey Welch, known on TikTok as the Hawk Tuah girl, launched her own crypto.

Hawk Tuah meme coins instantly achieved a market value of nearly $500 million, but lost 95% of its value in just a few hours.

Welch proved adept at exploiting her sudden fame, but the meme coin affair brought her a lot of criticism and accusations of fraud.