An Introduction
According to Investopedia a meme coin is:
- a cryptocurrency named after characters, individuals, animals, artwork, or anything else in an attempt to be humorous, light-hearted, and attract a user base by promising a fun community.
- Such coins typically have no intrinsic value and are worth whatever someone else is willing to pay for them.
- They are often driven by speculation and community support rather than underlying utility or technology.
While some meme coins have become quite valuable, they are also known for their volatility and high risk. Enter the new President, Donald J. (aka “Don”, “Donnie”, “DeeJay” or “Don-Jon”) Trump and the First Lady, Melania (aka “Mel” or “Mela”), who the weekend before the inauguration launched their own meme coins $TRUMP and $MELANIA.
The websites for both $MELANIA and $TRUMP describe the tokens as meme coins, but claim that they are not designed to be an investment opportunity, nor part of any political campaign.
“Melania memes are digital collectibles intended to function as an expression of support for and engagement with the values embodied by the symbol MELANIA and the associated artwork, and are not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type,” the $MELANIA site states.
The Reaction
The announcement was met with reviews from crypto experts who raised concerns that it could further delegitimize the crypto world.
- “The meme coins cost the U.S., the presidency, and his family, a lot of credibility and the consequences haven’t even started,” Gabor Gurbacs, the director of an alternative digital asset firm and a Trump supporter, wrote on X.
- Nic Carter, a general partner at a crypto investment firm and Trump supporter, told Politico, “It’s absolutely preposterous that he would do this. They’re plumbing new depths of idiocy with their meme coin launch.”
- One Washington lobbyist told Politico that the Trumps’ meme coin launch was “awful” and a “horrible look for the industry already trying to make the case that we’re not a bunch of hucksters, scammers and fraudsters.”
- Nigel Green, chief executive of the financial advisory firm deVere Group, told The Independent: “Let’s be very clear: this is more gambling than investing, It’s important to distinguish between speculative meme coins and legitimate digital assets that provide real value and utility… This is not the same as investing in sound assets. Gambling is not the same as investing.”
- On the other hand, Dr. Sean Dawson, head of research at the decentralized platform Derive.xyz, believes “the positive launches of the $TRUMP and $MELANIA tokens over the weekend shows the crypto-friendly tone of the incoming administration, which could further boost sentiment in the space.”
As some crypto investors raised concerns over Trump’s meme coin delegitimizing the industry, other watchdogs sounded the alarm over potential ethical conflicts.
- Norm Eisen, a former White House adviser who served on the board of the Citizens for Responsibility and Ethics in Washington, told The Washington Post it posed a “profound” conflict of interest saying that “He’s launching a major, new multibillion-dollar venture in the burgeoning crypto industry, where he has the most profound conflict of interest between [what] he’s seeking to gain and his duties to regulate that industry.”
The Reality
Initially “Donnie’s” meme coin skyrocketed in value to $14.5 billion only to fall to $6.6 billion (see here), and “Mel’s” coin originally had a market capitalization of almost $3B before falling to $790 million (see here) for LIVE updates.
