When Donald Trump won the presidential election in November, many cryptocurrency enthusiasts cheered, as he promised to prioritize deregulation and legalize crypto businesses.

In the days before his inauguration, industry heavyweights gathered in Washington for a "crypto ball" to celebrate their status as new members of the Washington establishment.

However, during the event, Trump made a move that shocked almost everyone - he announced a new token called TRUMP, a "meme coin" widely seen as having no intrinsic value, with its price entirely dependent on buying and selling behavior in the market.

Trump's supporters and some opportunistic day traders created billions of dollars in sales through trading the coin, driven by loyalty, hype, and the chance for quick profits. All these transactions resulted in billions of dollars in paper gains for the coin's creators - an affiliate of the Trump Organization. On the second day of the coin's release, Melania Trump announced her own meme coin, whose price also experienced a frenetic rise and fall. By Wednesday, TRUMP had become the 25th largest cryptocurrency globally, with a price of around $43, far below its previous high of $75.

Trump's meme coin brought a lot of attention to the cryptocurrency industry and attracted many new entrants to the field.

For some, these coins symbolize Trump's commitment to cryptocurrencies and his willingness to drive the industry's development. But more crypto insiders expressed distaste, seeing them as a money-grabbing exercise, a way for Trump to profit directly from his supporters. Trump's team controls at least 80% of the coin supply, giving them enormous influence over the price. While they are currently barred from selling these holdings, once they start dumping, it could cause a market collapse, devastating ordinary users.

Crypto industry insiders worry these coins may further erode public trust in an industry already rife with scams and malicious behavior.

"The crypto industry has let someone come in and make their first move emphasizing and exploiting the money-grabbing opportunities in this space, and that's just embarrassing," said crypto researcher and writer Angela Walch.

Trump has downplayed his role in launching the coin, saying in a January 21 press conference: "Other than I launched it, I know nothing about it." The Trump Organization did not immediately respond to a request for comment. The White House press secretary also declined to comment.

However, elected officials and legal experts have raised ethical and geopolitical concerns. They argue these tokens could become tools for bribery and conflicts of interest. "These tokens provide Trump a way to economically benefit from foreign adversaries and may lead him to prioritize his personal interests over those of the American people," said Puja Ohlhaver, a lawyer at Harvard's Democratic Innovations Lab.

What are Meme Coins?

TRUMP and MELANIA are both examples of meme coins. These cryptocurrencies are essentially "created out of thin air" by entrepreneurs writing blockchain code. Their value is entirely dependent on people's belief in them and willingness to buy them. To stoke market enthusiasm, these coin teams often leverage popular internet memes in their marketing. The logic is that if memes can drive culture, creativity, and even ideology on social media, why can't they also become financially valuable?

Dogecoin and Shiba Inu are two prominent examples, especially Dogecoin, whose price has spiked multiple times due to Elon Musk's tweets. However, meme coins lack intrinsic value, making them highly volatile and speculative. This is part of their appeal to some: if investors buy in at the right time, they can make huge profits. Conversely, if they buy in at market peaks, they can quickly lose all their money. Meme coins have also been used in some alleged scams, where investors have lost substantial sums.

Trump's Relationship with Meme Culture

Trump's supporters have often used memes as a marketing tool. During his presidential campaigns, a content creation team extensively posted pro-Trump memes on social media. Last summer, some unofficial Trump meme coins, like Pepe (TRUMP) and Maga People Token (PEOPLE), also experienced price fluctuations, with some investors seeing them as symbols of Trump's electoral prospects.

Trump has also made money from cryptocurrencies. He began selling NFT trading cards in 2022, earning millions of dollars according to financial disclosures. In September 2023, he launched an as-yet-unlaunched crypto platform called World Liberty Financial. By 2025, meme coins may have become the fastest way for emerging crypto entrepreneurs to make money.

The TRUMP Trading Frenzy

On January 18, just two days before the inauguration, Trump launched his token through a Trump Organization affiliate, CIC Digital LLC. This move caught the entire industry by surprise. It came as the "crypto ball" was underway, with guests like Snoop Dogg and House Speaker Mike Johnson. Crypto entrepreneur Nick O'Neill posted a video saying almost no one at the event knew the token existed.

The next day, the market went into a frenzy trading the token, triggering a chain reaction. The blockchain platform supporting the token, Solana, and the crypto exchange Coinbase both experienced trading delays of up to several hours. Coinbase CEO Brian Armstrong tweeted: "We didn't anticipate this level of trading activity."

In just one day, the team controlling the token (led by CIC Digital) had paper gains of around $51 billion. However, this figure was unrealistic, as the price would plummet if they tried to convert the tokens to dollars. Later that evening, Melania Trump released her own meme coin, MELANIA, which actually reduced TRUMP's market cap by billions, as traders seemed to sell TRUMP to buy the new coin. Within an hour of MELANIA's launch, TRUMP's price dropped from over $70 to around $45. A fake coin unrelated to Trump's son, BARRON, also briefly reached a market cap of $460 million before crashing 95%.

The Industry's "Soul-Searching"

Some of Trump's crypto coin supporters accused him of predatory behavior using meme coins. Cryptocurrencies advocate decentralization, yet the president's team controls at least 80% of the TRUMP supply. Another blockchain analytics firm, Bubblemaps, found 89% of the MELANIA token supply concentrated in a single crypto wallet. Coinbase executive Conor Gregor wrote on Saturday that the Trump team made $58 million just in trading fees.

"Trump's credibility is completely destroyed," wrote investment manager Michael A. Gayed. Trump's former White House communications director and crypto advocate Anthony Scaramucci said, "No one is going to think this is good for society."

Angela Walch summed up: "The whole industry is now in deep soul-searching. We've gained power, but is this aligned with our original goals?"

Concerns about Morality and National Security

Critics outside the crypto industry have also raised moral concerns. Trump is now directly involved in the industry he is responsible for regulating. (Control companies are Trump's business affiliates, who wrote that Trump Tokens "are not investments or securities, but a form of 'expressive support'.") Critics argue that the president's crypto windfall gives him no incentive to crack down on the industry, which could cause his token's value to plummet by billions of dollars. Ro Khanna, a Democratic congressman from California who is one of Congress's most prominent crypto supporters, wrote on X: "The law must ban elected officials from holding meme coins."

Some critics are concerned that these tokens pose a national security threat, as they allow foreign agents to buy large amounts of tokens as leverage over Trump's policy decisions. These agents could buy tokens to win Trump's support - or threaten to sell them, which could cause the token's price to plummet. Ohlhaver of Allen Lab says they can also use crypto to hide their identities from the world, except for Trump.

The Founding Fathers tried to prevent such conflicts of interest through the Constitution's Emoluments Clause, which prohibits the president from profiting from his office. (At the time, gift-giving was a common form of corruption among European rulers and diplomats.) Some argue that Trump issued the tokens before taking office, meaning he was acting as a private citizen. Crypto journalist Zack Guzmán wrote on X: "Issuing these tokens before Trump officially became president makes it less straightforward for them." "If that weren't the case, it would be much easier to claim that Trump profited from his presidency and violated the Emoluments Clause."

But Ohlhaver believes that as long as Trump holds token shares, there is a major conflict of interest. "He still owns the tokens, and if foreign adversaries hype them up, the value of those tokens will increase," she said.

Ohlhaver also said that Trump's meme coins fundamentally threaten the public's understanding of money. "As social media and global social networks have risen, it has become very easy to leverage your status and influence to create a new form of currency and legitimize it," she said. "For us, it is important to preserve our national public goods, to ensure that they serve our common interests, and not the narrow interests of the elite, who will reap huge benefits at the expense of everyone else."