(Bloomberg) - Donald Trump and his wife Melania’s new memecoins ignited criticism from crypto executives who were expecting the digital-asset sector to be treated seriously by the Republican’s incoming US administration.
The president-elect unveiled the “Trump” token on Friday and his wife Melania launched her “Melania” effort on Sunday. The Trump memecoin’s market value hit $15 billion at one point but then briefly slid below $8 billion as Melania’s token took some of the spotlight, figures from aggregator CoinMarketCap show.
The memecoin sector, stuffed with joke tokens like dogecoin (DOGE-USD) offering little intrinsic value and lots of volatility, is divisive as it feeds criticism of the nascent industry as too frivolous and risky for mainstream investors. Memecoins rely on social media tailwinds that can disappear as quickly as they arise.
While Trump’s latest crypto foray turbocharged speculation — bitcoin (BTC-USD) jumped to a fresh record on Monday just hours before his inauguration — some executives said it will do more harm than good to an industry trying to rebuild its reputation. It quickly added a windfall of billions of dollars, at least on paper, for Trump-linked entities just as the incoming president is said to weigh an executive order designating the asset class a “national priority.”
In a post on X, Balaji Srinivasan, an angel investor and former chief technology officer at US crypto exchange Coinbase Global Inc. (COIN), said memecoins are a zero-sum “lottery” where the “price eventually crashes and the last buyers lose everything.”
Rather than two new memecoins, the industry was keen to focus on Trump’s expected steps to foster wider industry growth following his inauguration. Crypto executives spent the past two years fending off a crackdown by the US Securities And Exchange Commission in the wake of the chaotic implosion of Sam Bankman-Fried’s trading platform FTX.
Inauguration Countdown
The Trump token’s market capitalization stood at just below $11 billion as of 11 a.m. in London, CoinMarketCap data show.
The Trump launches are “now clearly a blight that we will have to work to put behind us as builders,” said Rob Hadick, general partner at crypto-focused venture-capital company Dragonfly Capital.
In a separate post, SkyBridge Capital LLC founder Anthony Scaramucci pointed out the launch of Melania coin caused Trump coin to sink.
Scaramucci was briefly Trump’s director of communications in 2017 during the latter’s first presidency before being fired and becoming a vocal critic.
More ‘Consequences’
Meanwhile Gabor Gurbacs, director of digital-asset strategy at investment provider VanEck until last year and founder of PointsVille, said the memecoins “cost the US, the presidency and his family a lot of credibility.”
Gurbacs said in an X post that the consequences of the launches “haven’t even started” and called on Trump to fire his crypto advisers.
Representatives for Trump didn’t return requests for comment about the criticism of the memecoins from some digital-asset executives.
Trump used to be a crypto industry skeptic but pivoted as the sector poured huge sums into campaign coffers during the build-up to the US election. He now plans to turn the US into the linchpin of the global digital-asset industry and has backed the idea of establishing a national Bitcoin stockpile.
The president-elect’s previous forays into crypto include profitable collections of nonfungible tokens, digital collectibles that show him in a variety of poses and costumes. Along with his sons, he’s also endorsed World Liberty Financial (WLFI33036-USD), a project that has been much-hyped but for which details remain scarce.
The weekend memecoin drama was a “wild” turn of events that “even the crypto industry hadn’t quite imagined,” said Caroline Mauron, co-founder of Orbit Markets, a provider of liquidity for crypto derivatives. “I suppose a more conventional policy approach was expected — which may still be coming.”
By Ryan Weeks
With assistance from Suvashree Ghosh and Sidhartha Shukla
