Crypto executives warn Trump and Melania’s memecoins harm the industry
BREAKING: Donald Trump’s memecoin, $TRUMP, crashes over -40% as Melania Trump launches her own memecoin.
This is beyond insane. pic.twitter.com/6Oj2GGqjqF
— The Kobeissi Letter (@KobeissiLetter) January 19, 2025
You can't make this up:
The website used to launch $MELANIA was created on Saturday, January 18th, at 9:36 AM ET.
On January 19th, at 4:13 PM ET, the memecoin was launched.
That's a 31 hour gap from when the website was created to the launch of the coin.
Was the Melania… pic.twitter.com/RGQTbsS9aX
— The Kobeissi Letter (@KobeissiLetter) January 20, 2025
Donald Trump and his wife Melania’s new memecoins ignited criticism from crypto executives who were expecting the digital-asset sector to be treated seriously by the Republican’s incoming US administration.
The president-elect unveiled the “Trump” token on Friday and his wife Melania launched her “Melania” effort on Sunday. The Trump memecoin’s market value hit $15 billion at one point but then briefly slid below $8 billion as Melania’s token took some of the spotlight, figures from aggregator CoinMarketCap show.
The memecoin sector, stuffed with joke tokens like Dogecoin offering little intrinsic value and high volatility, is divisive as it feeds criticism of the nascent industry as too frivolous and risky for mainstream investors. Memecoins rely on social media tailwinds that can disappear as quickly as they arise.
The weekend launches are “now clearly a blight that we will have to work to put behind us as builders,” said Rob Hadick, general partner at crypto-focused venture-capital company Dragonfly Capital.
The sector was instead keen to focus on Trump’s expected steps to foster wider industry growth following his inauguration later Monday, including an anticipated executive order designating crypto a national priority.
In a post on X, Balaji Srinivasan, an angel investor and former chief technology officer at US crypto exchange Coinbase Global Inc., said memecoins are a zero-sum “lottery” where the “price eventually crashes and the last buyers lose everything.”
A memecoin is a zero-sum* lottery.
There is no wealth creation. Every buy order is simply matched by a sell order. And after an initial spike, the price eventually crashes and the last buyers lose everything.
* It’s actually negative sum if the platform takes a cut.
— Balaji (@balajis) January 19, 2025
President-elect Donald J. Trump announced the launch of the new token, $Trump, on Friday night as hundreds gathered for a crypto-inspired inauguration ball not far from the White House.
The venture won praise by some as a sign of how digital currencies are now going mainstream in the United States.
But economists and even some longtime crypto investors said the new digital coin, known as a memecoin, might also emerge as a landmark moment in the speculative history of crypto trading and the potential dangers it poses to the financial system. Memecoins are a type of cryptocurrency tied to an online joke or a celebrity mascot.
“If people want to gamble, I don’t really care,” said Lee Reiners, a former Federal Reserve economist who is now a lecturer for a center studying global economic markets at Duke University. “What I care about is when this crypto bubble bursts — and it will burst — it will end up impacting people across the economy even if they don’t have direct investment in crypto. And this new coin is making it worse.” [Continue reading…]