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Not long ago, the cryptocurrency industry was having the time of its life. It was Friday evening, and the best-connected players were canoodling in Andrew W. Mellon Auditorium for the first presidential inauguration Crypto Ball, a special evening co-sponsored by the nonprofit corporate alliance Stand With Crypto. Firms like MicroStrategy and Crypto.com, whose executives had met with and advised the president-elect during the transition, had sent over sponsorship funds and personal ambassadors to usher in the new Washington regime. Trump’s secretarial nominations for the Treasury and Commerce departments were in attendance. Rap icons Rick Ross and Snoop Dogg—who’d once shot an effigy of Donald Trump in a music video before devoting his life to crypto—were on deck to give live performances. David Sacks, on the verge of becoming Trump’s “White House A.I. and crypto czar,” was emceeing the whole affair and granting private conversations to VIP ticket holders. The digitized financial order was ascendant.
Then, at 9 p.m., Trump pulled one over on the partygoers.
As the hour commenced, Donald Trump announced, on his Truth Social platform, that his “NEW Official Trump Meme is HERE!” The president-elect was referring to a whole new $TRUMP cryptocurrency his team had created, a pool of 20 million “meme coins” that his fans could buy and trade on the Solana blockchain. No, this one had nothing to do with the World Liberty Financial initiative that the Trumps had launched over the summer, nor did it have anything to do with the “trading card” NFTs they’d been selling for a while. This low-value meme currency, in the style of Dogecoin (i.e., the namesake for the already-inefficient Department of Government Efficiency), was a total surprise to the supposed crypto insiders. After all, they had backed Trump so he would legitimize cryptocurrencies as a serious form of digital commerce, one whose best products empowered and enriched their users, instead of just selling them blurry JPEGs and spinning elaborate jokes based on internet memes. Understandably, more than a few of them wondered if Trump’s account had been hacked.
It hadn’t been, and the Trumpists of the crypto business began expressing some doubts about their guy. Investor Nic Carter, a guest at the ball, told Politico that the $TRUMP launch was an “absolutely preposterous” move that was “plumbing new depths of idiocy.” (As he wrote on X: “Trump rugged all of his biggest fans by dropping his memecoin during the crypto ball when we were all sloshed.”) YK Pek, a crypto consultant, claimed on X that Trump “has the wrong people in his ear re crypto policy.” ZeroLend co-founder Gafoor Khan referred to the memecoin situation as “heartbreaking,” while the influencer Ash Crypto groused, “Our industry is a fcking joke.” In a conversation with news outlet the Block, the CEO of the research firm Two Prime Digital Assets declared that the Trump meme coin would “bring us more towards a crypto casino than true reform.”
The heartbreak only intensified by Sunday afternoon, after first lady Melania Trump announced her own “Melania Meme” launch via Truth Social—that is, a new $MELANIA meme coin also tradable on the Solana blockchain. Martin Shkreli predicted that it’s “basically over for all crypto for a while.” The investment manager Michael A. Gayed referred to the meme coins as “A FUCKING DISGRACE.” CNBC Africa TV host Ran Neuner accused the presidential family of “grifting at the expense of the entire crypto community.” There were many such cases. The investment bank TD Cowen even worried that the meme coin uproar could distract Congress from passing the type of industry-friendly legislation for which crypto executives had so fervently lobbied.
The jitters hadn’t calmed by the time Trump himself was sworn in, not least because the reelected president didn’t mention cryptocurrencies even once during his speech. Still, the foot soldiers fell right back into line on Tuesday after the new administration made some welcome moves: enshrining a new “crypto task force,” under the aegis of the once-crypto-hostile Securities and Exchange Commission, that would seek industry input on regulatory matters; and granting a presidential pardon to Ross Ulbricht, the onetime operator of the infamous dark-web drug marketplace Silk Road. (Ulbricht’s early adoption of Bitcoin, both within Silk Road and outside it, made him a folk hero to crypto enthusiasts.) Trump himself, at a Tuesday press conference, had just this to say about $TRUMP: “I don’t know where it is. I don’t know much about it, other than I launched it.”
The crypto-world drama Trump’s team spurred with this meme coin gambit is indicative of an ever-present tension between the once-crypto-skeptical Trump and his newfound armies of single-issue loyalists.
The more bitter crypto traders aren’t wrong to suspect possible Trumpian self-enrichment via digital money. Much of $TRUMP’s supply is held by two companies: Fight Fight Fight LLC, a firm established in Delaware earlier this month; and CIC Digital, a branch of the Trump Organization. $MELANIA is sold by MKT World LLC, the company Melania Trump established after her husband’s first term in order to hawk NFTs and other digital “collectibles.” As the New York Times has noted, MKT World shares an address with the Florida-based Trump International Golf Club.
More to that point, many of the companies whose leaders had lobbied Trump and sponsored the Crypto Ball began listing $TRUMP on their exchanges over the weekend: Coinbase, Robinhood, and Kraken, the latter of which also listed $MELANIA. (All of their mobile apps saw a spike in downloads after the first meme coin launch.) Detractors had also expressed suspicion that $TRUMP’s sudden launch was timed specifically to allow traders who weren’t at the ball to buy up the tokens first and push up the value before more-experienced players weighed in. A few asset-management firms are now pushing the administration to approve instruments that will allow users to trade off $TRUMP’s value on the stock market proper.
So while $TRUMP’s price enjoyed an initial weekend surge—though its total worth never got close to touching the much-misreported $50 billion figure—$MELANIA’s Sunday drop turned things haywire as “demand for the tokens overlapped,” per the Wall Street Journal. Some $TRUMP holders who also wanted $MELANIA, but were unable to afford both, decided to offload the first meme coin in order to buy the second; meanwhile, the $MELANIA fracas compounded general distrust of the couple’s coinage. Add that to a wave of obstructive traffic on the Solana blockchain, as wrought by the dual coin drops, and you can understand why both tokens’ values plunged after the weekend and, as of this writing, sit well below their respective peaks. This sort of rapid boom-bust, familiar to longtime crypto holders, elicited fears of yet another rug pull.
Considering that the most significant cryptocurrencies have earned their value from cults of personality (e.g., Bitcoin with Satoshi Nakamoto, Ethereum with Vitalik Buterin, Dogecoin with Elon Musk), it’s somewhat fitting that the Trump meme coin is benefiting from its public affiliation with a powerful personality. But that won’t be enough for the long term. Right now, the community is grateful to be rid of a crypto-skeptical president, Joe Biden. Yet, with all this added power and prominence, the old fissures will expose themselves again.
As I wrote back in late 2022, a version of this occurred just after the fall of FTX, when Bitcoin maximalists (those who believe that crypto and blockchain resources should be devoted to Bitcoin and Bitcoin alone) claimed that Sam Bankman-Fried’s financial fraud could be attributed to his devotion to “crypto” as a whole. Devotees of crypto used the blockchain and encryption protocols birthed via the emergence of Bitcoin for decidedly non-Bitcoin purposes: things like NFTs, meme coins, and gaming rewards. This clash pits Bitcoin purists, ostensibly distrustful of fiat currency and seeking independence from a government-run economic paradigm, against digital enthusiasts who want to instead make the entire global economy more like crypto. There’s a reason that Bitcoin Magazine (whose parent company helped sponsor the Crypto Ball) denounced $TRUMP as a “shitcoin” while watching every other Trump move as an indicator of how Bitcoin, and only Bitcoin, will move.
Obviously, things haven’t played out ideally for anyone. Bitcoiners have come to love the currency’s adoption as legal tender in other countries, and the value of the central coin has become just as responsive to broader macroeconomic conditions as anything else. But the primacy of Bitcoin remains the goal, and it’s going to be difficult for the HODLers to get exactly their way in this alliance of convenience with “shitcoiners.”
Trump’s campaign promised a “strategic Bitcoin reserve” as red meat for his Bitcoiner fans—and they got quite upset when preinauguration rumors spread within the crypto space that he might try to start an “America First strategic reserve” of non-Bitcoin currencies. So far, there have been no official updates on either proposition, but Trump’s personal crypto ventures seem to be trying something like the latter. On Inauguration Day, World Liberty Financial announced “strategic purchases” of various cryptocurrencies, including Ethereum, Wrapped Bitcoin (a version of Bitcoin that can be traded on the Ethereum blockchain and not just on the original Bitcoin protocol), and Tron (the currency founded by Justin Sun, who recently bailed Trump’s World Liberty venture out of insolvency). One place where many of these holdings are likely to be stashed? Nowhere other than Coinbase, whose CEO, Brian Armstrong, led the crypto industry’s pro-Trump election efforts and even met with the man himself during the transition.
There are some forks in the path ahead. Will Trump and his team buy into the purist visions of their crypto buddies, or will they all instead use the support to enrich themselves? The crypto community has already gotten a hint as to the eventual answer.
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