Time Magazine: Trump's currency issuance, has Pandora's box been opened?

Source: TIME

Compiled and edited by: BitpushNews

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

Days before he was sworn in, the industry’s heavyweights gathered in Washington for a “crypto ball” to celebrate their status as new members of Washington’s establishment circle.

However, during the event, Trump shocked almost everyone by announcing a newTokenThis "meme coin" is generally believed to have no intrinsic value and its price depends entirely on buying and selling behavior in the market.

Trump supporters and some opportunistic day traders generated billions of dollars in sales through trading in the coin, driven by loyalty, hype and the opportunity for quick profits. All of this trading has enabled the coin's founders, subsidiaries of the Trump Organization, to realize billions of dollars in gains on paper. The day after the coin was launched, Melania Trump announced her own meme coin, and the price of the coin also experienced a wild rise and fall. By Wednesday, TRUMP became the world's 25th largest cryptocurrency by market value, according to CoinMarketCap, with a price of about $43, far below its previous high of $75.

Trump’s meme coin has brought a lot of attention to the cryptocurrency industry and attracted many newcomers to the field.

For some, these coins symbolize Trump's commitment to cryptocurrency and his willingness to promote the development of the industry. But more people in the cryptocurrency circle are disgusted by this, believing that these coins are just a money-making behavior and a means for Trump to profit directly from his supporters. Trump's team controls at least 80% of the coin supply, which gives them a huge influence on the price of the coin. Although they are temporarily prohibited from selling these holdings, once they start selling, it will cause the market to collapse and cause ordinary users to suffer heavy losses.

Cryptocurrency industry insiders worry that the coins could further sow public doubts about an industry already rife with scams and malicious behavior.

“It’s just embarrassing that the crypto industry put a person in power whose first act is to highlight and exploit the money-making opportunities in the space,” said Angela Walch, a cryptocurrency researcher and author.

Trump has downplayed his role in launching the coin, saying at a press conference on Jan. 21, “I know almost nothing about it other than I launched it.” The Trump Organization did not immediately respond to a request for comment. A White House press officer also declined to comment.

However, elected officials and legal experts have raised ethical and geopolitical concerns.Token可能成为贿赂和利益冲突的工具。「这些Token为特朗普提供了一条从外国对手那里获得经济利益的途径，并可能使他将个人利益置于美国人民的集体利益之上，」哈佛大学民主创新实验室的律师普贾奥尔哈弗（Puja Ohlhaver）说道。

What is Memecoin?

Both TRUMP and MELANIA are meme coins. This type of cryptocurrency is essentially created by entrepreneurs through writingBlockchainCode "creates" out of thin air. Their value depends entirely on people's belief in them and willingness to buy them. In order to stimulate market enthusiasm, the teams of these coins usually use popular memes on social media for marketing. The logic behind this is that if memes on social media can promote the development of culture, creativity and even ideology, then why can't they also become valuable financially?

Dogecoin and Shiba Inu are two classic examples, especially Dogecoin, as Elon Musk's tweets have caused its price to surge on several occasions. However, memecoins lack intrinsic value, which makes them particularly volatile and speculative. This characteristic is precisely what makes them attractive to some people: if investors buy at the right time, they may make huge profits. On the other hand, if they buy at the market high, they may quickly lose all their funds. In addition, memecoins have been used in some alleged scams in which investors lost a lot of money.

Trump's Relationship with Meme Culture

Trump supporters often use memes as a marketing tool. During his presidential campaign, a team of content creators once posted a large number of pro-Trump memes on social media. Last summer, some unofficial Trump meme coins, such as Pepe (TRUMP) and Maga People Token (PEOPLE), also experienced price fluctuations, and some investors even regarded them as symbols of Trump's chances of winning.

Trump also used cryptocurrencymake moneyHe began selling NFT trading cards in 2022 and made millions, according to financial disclosure documents. In September 2023, he launched World Liberty Financial, a cryptocurrency platform that has yet to go live. By 2025, meme coins may have become the fastest way for emerging crypto entrepreneurs to make money.make moneyway.

Trump's Trading Spree

On January 18, two days before the inauguration, Trump launched his token through CIC Digital LLC, an affiliate of the Trump Organization. The move took the industry by surprise. It was in the middle of a "crypto ball" that also invited guests such as Snoop Dogg and House Speaker Mike Johnson. Crypto entrepreneur Nick O'Neill posted a video at the event saying that almost no one at the scene knew about the existence of the token.Xiaobai Navigationexist.

The next day, the market began to trade the token crazily, triggering a chain reaction.BlockchainSolana Platform and Cryptocurrencyexchange Coinbase experienced hours-long delays. Coinbase CEO Brian Armstrong wrote on Twitter: "We did not anticipate this surge in transactions."

In just one day, the team controlling the tokens (led by CIC Digital) had the tokens valued at about $51 billion on their books. However, this figure was unrealistic because if they tried to exchange the tokens for dollars, their price would quickly fall. Later that same day, Melania Trump released her own meme coin, MELANIA, which actually cut billions of dollars from TRUMP's market value as traders appeared to sell TRUMP to buy the new coin. Within an hour of MELANIA's launch, TRUMP's price fell from over $70 to about $45. A fake coin, BARRON, that has nothing to do with Trump's son, also had a market value of $460 million at one point, but then plummeted by $95%.

The industry's "soul-searching"

Some of Trump's cryptocurrency supporters accused him of using memecoins for predatory behavior. Cryptocurrencies advocate decentralization, but the president's team controls at least 80% of TRUMP supply. AnotherBlockchainAnalysis firm Bubblemaps found that 89% of the MELANIA token supply is concentrated in one cryptowalletCoinbase executive Conor Gregor wrote on Saturday that the Trump team made $58 million in transaction fees alone.

“Trump’s credibility is completely ruined,” wrote investment manager Michael A. Gayed. “No one thinks this behavior is good for society,” said Anthony Scaramucci, Trump’s former White House communications director and cryptocurrency advocate.

Angela Walch concluded: “The industry is now in the midst of a profound soul-searching. We have been given the power, but is it in line with our original goals?”

On morality and the stateSafetyConcerns

Critics outside the cryptocurrency industry have also raised ethical concerns. Trump is now directly involved in the industry he is charged with regulating. (Control, an affiliate of Trump’s business, wrote that the Trump Token “is not an investment or security, but an ‘expression of support.’ ”) Critics argue that the president’s cryptocurrency windfall gives him little incentive to crack down on the industry, which could cause his tokens to lose billions of dollars in value. Rep. Ro Khanna, D-Calif., one of the most prominent cryptocurrency supporters in Congress, wrote on X that “the law must prohibit elected officials from holding memecoins.”

Some critics worry that these tokens could have a negative impact on the countrySafetyThe operatives could also use cryptocurrencies to gain leverage over Trump’s policy decisions, posing a threat because they allow foreign agents to buy large quantities of tokens as leverage over Trump’s policy decisions. Those agents could buy the tokens to win Trump’s support — or threaten to sell them, which could cause the token’s price to plummet. They could also use encryption to hide their identities from everyone in the world, except Trump, Allen Lab’s Ohlhaver said.

The Founding Fathers sought to prevent this conflict of interest with the Constitution’s emoluments clause, which prohibits the president from using his office to enrich himself. (At the time, gift-giving was a common form of corruption among European rulers and diplomats.) Some have argued that Trump’s issuance of tokens before he was sworn in means he was acting as a private citizen. “It would have been much easier for them to issue these tokens before Trump officially became president,” crypto journalist Zack Guzmn wrote on X. “If it weren’t, it would have been much easier to claim that Trump profited from his presidency and violated the emoluments clause.”

But Ohlhaver argues that as long as Trump owns a share of the tokens, there is a major conflict of interest. “He still owns the tokens, and if foreign adversaries hype them up, the price of those tokens will appreciate,” she said.

Ohlhaver also said Trump's meme coin fundamentally threatens the public's understanding of money. "With the rise of social media and global social networks, it has become very easy to use your position and influence to create and legitimize a new form of money," she said. "It is important for us to safeguard our national public goods and ensure that they serve our common interests rather than the narrow interests of an elite group that will reap huge benefits at the expense of everyone else."

The article comes from the Internet:Time Magazine: Trump's currency issuance, has Pandora's box been opened?

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