Donald Trump focused on memecoins, not promises to crypto bros

Getting your Trinity Audio player ready...

Donald Trump broke the hearts of crypto bros by failing to do or say anything related to digital assets on his first day as the 47th President of the United States.

• Trump memecoin madness
• Critics pounce
• SEC/CFTC changes
• Exchanges bend the knee
• WLF enjoys TRUMP tailwind
• Acting FDIC chair promises banking changes
• BTC’ strategic reserve’ still in limbo

Trump shocked nearly everyone by launching an official $TRUMP memecoin late on the night of January 17, just as the ‘crypto’ cognoscenti were gathered for their ‘crypto ball’ celebrating Trump’s inauguration. Announced via Trump’s official social media channels, the $TRUMP news was first greeted with suspicion that the accounts had been hacked by the token issuers.

But the news was quickly confirmed, sparking a meteoric rise in the Solana-based token’s fiat value. Within an exceedingly brief period, the token rocketed into the top 20 in terms of overall market cap, as the token’s opening price of $10 soared to over $72 by midday on January 19. Thanks to $TRUMP’s launch, the president-elect increased his net worth (on paper, at least) by billions of dollars.

Reaction to $TRUMP was decidedly mixed, with many crypto bros cheering on their champion for following them down the memecoin rabbit hole. Their only objection seemed to be the lack of advance notice that prevented them from buying TRUMP at even lower prices.

But critics took a dimmer view. Some noted the token’s sketchy tokenomics—80% of supply controlled by insiders who are allowed to start selling in three months—as well as the glaring conflicts of interest in the man who now controls the crypto regulatory agenda deciding to issue tokens that personally enrich himself and his family.

Later on January 19, $TRUMP crashed hard, falling below $50 in the space of a few hours (and fell to $40 following Trump’s inaugural speech). The culprit, it turned out, was another Trump family memecoin, this one issued by Trump’s wife, Melania.

The $MELANIA token—which has even sketchier tokenomics than $TRUMP—has undergone even more dramatic volatility—shooting up to nearly $13, falling below $8, retaking $13, then falling below $8 again—all in the space of 14 hours or so. As Inauguration Day came to a close, the token was struggling to stay above $4.

The back-to-back release of two Trump memecoins has the crypto sector waiting to see if other family members—or domestic servants or one of the religious leaders who spoke at the inauguration—will drop their own tokens.

We’ve already seen scammers take advantage of this confusion, one claiming that a token had been issued by Donald and Melania’s son, Barron. The $BARRON token soared to a $460 million market cap before abruptly losing 95% of its value.

Interestingly, the rise of the Trump family tokens appears to have come at the expense of many other high-profile memecoins, including DOGE, PEPE, SHIB and others, which saw major selloffs following confirmation that $TRUMP was real. The suggestion is that there’s a finite amount of value in the memecoin ecosystem, and there can be only one king (and queen) of this sh*tcoin hill.

The reviews are in

The tokens’ critics didn’t mince words. Balajis Srinivisan, former CTO at the Coinbase (NASDAQ: COIN) exchange and general partner at the Andreessen Horowitz venture capital group, said every memecoin is “a zero-sum lottery. There is no wealth creation … after an initial spike, the price eventually crashes and the last buyers lose everything.”

Barstool Sports boss Dave Portnoy compared $TRUMP to the Hawk Tuah girl’s memecoin debacle, adding “[c]an I string up my own coin now and tell people it’s a Ponzi scheme from the jump and I’m gonna rug pull at some point and you better just hope you’re out when I do it and that would make the entire thing legal?”

Politico quoted BTC maximalist Nic Carter saying it was “absolutely preposterous that [Trump] would do this … They’re plumbing new depths of idiocy with the memecoin launch.”

Mark Cuban suggested the message from the president-elect was “Mint it, print it, sell it F*ck it.” Cuban also warned that this action meant goodbye to “whatever hope the crypto industry had of legitimizing itself.”

Gabor Gurbacs, Van Eck’s former head of digital asset strategy, tweeted that Trump should “fire his crypto advisors” because these tokens “cost the U.S., the presidency and his family a lot of credibility and the consequences haven’t even started.”

Former White House spokesman Anthony Scaramucci called the $TRUMP launch “Idi Amin level corruption” and warned that “anyone in the world can essentially deposit money into bank account of President of USA with a couple clicks. Every favor—geopolitical, corporate or personal—is now on sale, right out in the open.”

Back to the top ↑

SEC/CFTC changes

The $TRUMP token was released just hours after outgoing Securities and Exchange Commission (SEC) Chairman Gary Gensler left his office for the final time. It’s seems a lock that Gensler—the regulatory thorn in crypto’s side over the past four years—would have viewed $TRUMP as worthy of a civil complaint for offering unregistered securities to the public. Incoming SEC Chair Paul Atkins? Not so much.

Mark Cuban noted that Gensler “has got to be laughing his ass off” at how this played out and warned that Atkins “has got to be pissed. If he believes this nonsense he has no ability to enforce any SEC law. Stock, token. Bond. Nothing”

As some observers have noted, this doesn’t bode well for the future. Nothing in the law has changed as a result of Trump’s new token, only people’s perception of the law and the risks—or lack thereof—of violating the law. As this site’s founder has noted, crypto operators will take Trump’s move as a greenlight to take all manner of risks that are almost guaranteed to cause many people financial hardship down the road.

On January 20, the SEC’s three remaining commissioners—Hester’ Crypto Mom’ Peirce, Mark Uyeda, and (until Trump nominates her replacement) Caroline Crenshaw—issued a statement thanking Gensler for his “zealous advocacy on behalf of our agency and investors, and your friendship.” The trio noted that while commissioners “approached policy issues from different perspectives, there was always dignity in our differences.”

Later Monday, Trump officially announced that the pro-crypto Uyeda would serve as acting chair until Atkins gets through his Senate confirmation hearing.

Meanwhile, over at the Commodity Futures Trading Commission (CFTC), Commissioner Caroline Pham has been named acting chair following former Chair Rostin Behnam’s resignation. The CFTC is widely expected to be given the primary role in regulating digital assets during Trump’s second go-round.

Pham, a Republican-appointee and noted crypto fan who once posed arm-in-arm with convicted crypto fraudster Sam Bankman-Fried, issued a brief statement saying she looked forward to “engaging with all stakeholders in this new capacity as we focus on the CFTC’s mission to promote well-functioning markets that support economic growth and the competitiveness of the United States.”

Back to the top ↑

Exchanges bend the knee

Most of the early trading of $TRUMP was on non-U.S. exchanges, including Binance, but American exchanges were quick to fall in line. Kraken was the first U.S. exchange to list $TRUMP, while the crypto unit of online brokerage Robinhood (NASDAQ: HOOD) added the token on Sunday.

Crypto.com went one better by changing the name of its app to include $TRUMP. Perhaps that’s why Crypto.com CEO Kris Marszalek was spotted among the select group invited to watch Trump’s inauguration inside the Capitol.

Coinbase announced over the weekend that it was adding $TRUMP to its token ‘listing roadmap,’ then listed the token on Monday under its ‘Experimental’ category, allegedly due to its high volatility.

John Deaton, a pro-crypto attorney who launched a failed bid to defeat crypto critic Sen. Elizabeth Warren (D-MA) in last year’s election, tweeted an interesting defense of these exchanges on Monday. Deaton acknowledged his lack of personal support for the $TRUMP token, but “as a lawyer,” he understood the exchanges’ decision to list it.

Deaton’s logic goes as follows: “How could the SEC, in good faith, continue prosecuting Coinbase and Kraken for selling crypto tokens when they sell a crypto token issued by the President of the United States?” Touché.

Back to the top ↑

WLF enjoys the $TRUMP tailwind

Meanwhile, the Trump family’s World Liberty Financial (WLF)—which claims to be a decentralized finance (DeFi) project although it hasn’t done anything remotely DeFi to date, just sell its own WLFI’ governance’ token—used the hoopla to announce that it had exceeded its original sales target of 20 billion WLFI and thus it would issue “an additional 5% of our token supply” for sale to the public.

The price of these additional five billion WLFI tokens was 5¢ apiece, a significant hike from the 1.5¢ price of the initial coin offering. As of Monday evening, total WLFI sales were now hovering just under 22 billion tokens.

WLF has yet to reveal exactly how much cash it’s raised from these sales, but Arkham Intelligence shows WLF’s digital wallets now contain a variety of tokens worth over $333 million. Given that a Trump-owned entity gets 75% of all WLFI sales over $30 million, it’s safe to say Trump is having a good day.

A good chunk ($45 million) of the new sales came from Tron founder Justin Sun, who last November bought $30 million worth of WLFI when it became clear that (a) the general public wasn’t interested in pushing WLFI over that $30 million profit threshold, and (b) this was a way to curry favor with the incoming president by putting money directly in his pocket.

Showing they know how ‘you wash my back’ works, WLF announced they’d acquired $4.7 million worth of Tron’s native token TRX. The purchase was part of a $112.8 million acquisition spree that also saw WLF add $47 million worth of ‘wrapped’ BTC (another Justin-linked token), plus $4.7 million apiece of AAVE, LINK, and ENA. (The ’47’ theme was reportedly a tribute to Trump being sworn in as the 47th U.S. president.)

WLF also bought $47 million worth of Ethereum’s ETH token. This was accompanied by reports that WLF had acquired the rights to several Ethereum-related domain names, including worldliberty.eth, trumpcoin.eth, erictrump.eth and barrontrump.eth.

Hopefully WLF will get to hang on to these newly acquired tokens for a while. Recall that the technical principals behind WLF were previously involved with Dough Finance, a different DeFi project that lost $1.8 million via an exploit last summer. Are you tired of all the winning yet? If not, we suspect you will be shortly.

Back to the top ↑

Acting FDIC chair promises changes

On Monday, Reuters quoted Jeremy Allaire, CEO of the USDC stablecoin-issuer Circle, saying he expected Trump to “immediately” issue an order granting digital asset operators greater access to mainstream banking options. Crypto bros have long claimed to be the victim of a federal persecution intended to deny them banking access, even as Freedom of Information Act requests show this claim to be so much hot air.

On Monday, Trump appointed Travis Hill as acting chair of the board of directors of the Federal Deposit Insurance Corporation (FDIC), the alleged boogeyman behind this alleged debanking. On January 10, Hill gave a speech slamming the FDIC’s previous crypto stance, saying “adopting a new approach to digital assets—and putting an end to any and all Choke Point-like tactics—are essential first steps.”

Hill also claimed that the financial regulators “need to reevaluate our approach to implementing the Bank Secrecy Act (BSA).” Stopping terrorists and criminals is all well and good, but “the current BSA regime creates an incentive for banks to close accounts rather than risk massive fines for inadequate BSA compliance.”

And in keeping with Trump’s desire to purge the federal bureaucracy of anyone insufficiently in step with his desires, Hill warned that “there is no place at the FDIC for anyone who has pushed—explicitly or implicitly—banks to stop serving law-abiding customers.”

Back to the top ↑

BTC reserve still in limbo

Anticipation of great things for ‘crypto’ under a second Trump presidency sent the BTC token to a new all-time high early on January 20th, briefly topping $109,000. But when Trump’s inaugural speech concluded without so much as a single mention of anything to do with digital assets, BTC plunged to $99,800 before regaining some of its lost ground.

It didn’t help when Trump’s White House issued a document detailing the new administration’s “America First priorities.” Trump had promised to deliver as many as 200 executive orders on his first day, and while the White House released dozens of these signed orders, none involved digital assets, blockchain, or the fabled BTC strategic reserve/stockpile that crypto bros have been hotly anticipating.

That lack of action on the reserve front followed a report last week in the New York Post that claimed Trump was mulling a reserve that contained not just BTC but “digital coins founded in the U.S., like Solana, [USDC] and Ripple’s XRP.” Trump was said to have enlarged his reserve token criteria after meeting with some of the execs behind these coins following the November election.

The Post quoted anonymous insiders who expressed concern that a mixed-bag reserve “could delegitimize efforts to promote [BTC], which is the asset they want to prioritize.” That report came just one day before Trump dropped his memecoin, leaving little doubt where the new president’s priorities lie. (Getting paid.)

Worse, Trump’s original ‘stockpile’ plan was for the U.S. to retain the 200,000+ BTC the country has seized over the years, but that plan has taken a couple of hits in recent weeks.

First, the Department of Justice (DOJ) received federal court authorization to sell over 69,000 BTC seized during an investigation related to the Silk Road dark web marketplace. (Freeing Silk Road’s founder Ross Ulbricht from federal prison was another of Trump’s ‘Day One’ promises he appears not to have kept.)

Second, the DOJ informed a different federal court last week that it was appropriate to return over 94,000 BTC to Bitfinex, the exchange from which the tokens were stolen in 2016.

These moves alarmed Sen. Cynthia Lummis (R-WY), a major Congressional advocate of the BTC reserve strategy. Last week, Lummis sent an angry letter to the U.S. Marshals Service (the custodians of the seized BTC) demanding to know why they were taking this “rushed approach” given Trump’s comments about not selling government-held BTC.

It’s entirely possible that Trump will issue his crypto orders as the week goes on. Or possibly even in the early hours of Tuesday, as the notorious night owl gets back from the inaugural ball and rage-tweets until he falls asleep.

But until those orders appear, crypto bros will be asking themselves why, after all the money they spent getting him elected, after all the promises he made them, why they’re left staring at their phone, seemingly abandoned, kicked to the curb. Perhaps Coinbase should rebrand itself Greenland Coin or Panama Coinal or something, then maybe, just maybe, they’d get the attention they crave.

Watch: Teranode is the digital backbone of Bitcoin