Trump’s new coin sparks anger in crypto world

US President Donald Trump has been criticized for flipping a coin while claiming he “didn’t know much” about cryptocurrency.

The digital coin called TRUMP appeared on his social media accounts ahead of his inauguration on Monday and quickly became one of the most valuable crypto coins. The value of a single coin rose as high as $75 in one day, but has since fallen to $39.

But the launch of the so-called meme-coin – a cryptocurrency with no use other than for fun or speculation – has been widely criticized by industry insiders.

“Trump’s comments that he doesn’t know much about the coin support my view that he is making fun of the industry. It’s a set-up,” said Danny Scott, CEO of CoinCorner.

The latest drop in value came after Trump told reporters: “I don’t know much about it other than I started it, other than it was very successful.”

When told his coin earned him several billion dollars, he downplayed it by saying “several billion – that’s peanuts to these guys”, pointing to the tech billionaires gathered for a press conference on AI.

Meme coins are often used by speculators to make money or as a way for fans to show support for a celebrity or moment in internet culture.

This is not the first time Trump has sold crypto products. He made millions by launching a series of NFTs of him in various superhero poses in 2022.

Some industry analysts say the president having his own coin is a sign that others should follow.

“The TRUMP token just signaled to every business, municipality, university, and individual brand that crypto can now be used as a capital formation and customer bootstrapping mechanism,” Jeff Dorman of the investment firm posted online Arca.

However, the general sentiment seems to be negative towards the president’s meme coin.

Many people in the crypto world are waiting for Trump to confirm his campaign promises to boost the industry in the United States. People like Danny Scott hope to see targeted plans from the administration, particularly around Bitcoin.

Last year, Trump promised Bitcoin fans that he would make the United States the “crypto capital of the planet.” Days into his term, the president has not issued any executive orders involving cryptocurrency, nor has he mentioned it in his speeches.

The TRUMP coin is now the 25th most valuable crypto coin with a value of around $8 billion, according to the website CoinMarketCap.

Trump and his team own 80% of the coins, so, in theory, they would make billions of dollars if they sold their shares and the price stayed the same.

This configuration has been described by crypto researchers at K33 as obsolete for similar tokens.

“There’s nothing sugar-coating this – these tokenomics are horrible for a coin,” said David Zimmerman, an analyst at K33.

However, K33 analysts acknowledge that the remaining 80% of coins cannot be sold on the open market, so investors are partially protected from price shocks.

There are thousands of cryptocurrency coins and anyone can create one.

First Lady Melania Trump launched her own coin on the eve of the inauguration, which is now worth $700 million since going from $13 a coin to $2.70.

But many meme coins have led to heavy losses for people who invest in them.

Dan Hughes of crypto firm Radix thinks the president and his wife launching their meme-coins undermines the positive aspects of the industry.

“This trend of celebrity-led token launches, particularly by political figures, potentially marks a worrying trend in crypto markets, where influence and liquidity manipulation could overshadow fundamental value creation,” a he declared.

Others in the cryptocurrency world think launching memecoins to make money is demeaning.

“The introduction of these coins during the presidential inauguration raises concerns about possible conflicts of interest and could undermine the dignity of the president and first lady,” said Grzegorz Drozdz, market analyst at the investment company Conotoxia.