The Trump family continuously issues coins, "harvesting" the cryptocurrency industry: right or wrong

Author: Deng Tong, Golden Finance

On January 17 at 9:44 PM local time, Trump announced on his social media account that he would launch his personal meme coin TRUMP, and users need to visit the website with the domain "gettrumpmemes" to obtain the meme coin.

Once the news was released, the market was filled with both support and opposition, and the entire cryptocurrency market was in an uproar. Many investors also seized the opportunity to make a fortune. According to CoinGecko data, the TRUMP token reached a historical high of $72.02 at 8:03 PM on January 19.

Trump is set to be sworn in at noon on January 20 (1 AM Beijing time on January 21) under the supervision of Chief Justice Roberts, followed by an inaugural speech. The three major American billionaires, Musk, Bezos, and Zuckerberg, will be present together. Two sources indicated that Trump is preparing to issue a large number of executive orders and directives on his first day in office, potentially exceeding 100 items, covering areas such as immigration and energy production.

At this clever timing, Trump's issuance of the meme coin has sparked market speculation: will such a move truly benefit the cryptocurrency market? Is it a game of chasing money with power?

1. What do industry insiders who support Trump's coin say?

• Andrei Grachev, Partner at DWF Labs, tweeted: Trump is doing the best marketing for the cryptocurrency market.

• Charles Hoskinson, Co-founder of Cardano, revealed on X that 78.5% of Trump's net worth of $29.6 billion is in cryptocurrencies, making him one of the wealthiest cryptocurrency entrepreneurs. This is mainly due to the issuance of the meme coin TRUMP. Hoskinson also pointed out that Trump's extensive involvement in cryptocurrencies could lead to significant changes in the industry. His administration may redefine the IRS's policies on capital gains tax and fair market value assessments of digital assets, and these expected changes could impact the regulatory framework of the cryptocurrency industry.

• Yat Siu, Co-founder of Animoca Brands, posted on X: He suggested that Trump carefully consider using TRUMP to support important charitable foundations and causes, as the handling of the token will have a ripple effect on the trust and reputation of the entire crypto and Web3 industry. Trump has the ability to do great things with TRUMP, which could make him the most generous and charitable president in American history.

• Eric Trump, Executive Vice President of the Trump Organization, stated on X, "I am very proud of our achievements in the cryptocurrency space. Trump is currently the hottest digital meme on the planet. I firmly believe WLFI will completely change DeFi/Cefi and will be the future of finance. We are just getting started."

2. What do industry insiders who oppose Trump's coin say?

• Forbes stated: Trump's issuance of the meme coin could trigger a constitutional crisis. The report noted that while the newly nominated SEC chairman may introduce crypto-friendly policies, the fundamental legal principles remain unchanged, and the personality and policy preferences of SEC leaders cannot override established securities laws. The Howey Test from the Supreme Court has been the cornerstone of securities regulation for 75 years and is not influenced by individual government and political appointments. Although the SEC's enforcement focus may change under new leadership, its legal obligation to apply the Howey Test remains absolutely unchanged. This enduring framework for assessing investment schemes is independent of any chairman's crypto-friendly stance or industry relationships. The report pointed out that the launch of the TRUMP meme coin exposes a fundamental tension in contemporary American politics. While Trump positions himself as an advocate for the cryptocurrency industry and promises to make the U.S. the "global cryptocurrency capital," the structure and timing of his own digital token project raise concerns about the troubling fusion of personal wealth and political power. The concentration of token ownership in companies associated with Trump, combined with the timing of the issuance just before the inauguration, raises questions: Does this represent genuine support for cryptocurrency innovation, or is it merely a clever attempt to further monetize the presidency?

• Arthur Hayes commented on "Trump issuing the meme TRUMP": This is the launch of the political meme coin market. Any politician not afraid of public opinion will launch their own meme. The token economics are fugazi (a derogatory term for fake things), but these "bullshit" tokens reach $10 billion. However, he also noted: Meme coins are the best fan interaction tools ever. If Trump does this, then the risks for Beyoncé or Swift doing the same will be much lower.

• Nick Tomaino, former Coinbase executive and crypto venture capitalist, stated that Trump owns 80% of the TRUMP coin and launched it just hours before the inauguration, which is predatory and could harm many people. Trump should airdrop to the public, rather than using this to enrich himself or his team. Currently, it looks like an FTX token. But he also pointed out: Trump's move signifies a shift from the anti-crypto era of Biden to the Trump era.

• Balaji Srinivasan, former CTO of Coinbase, stated: Trump's net worth of approximately $59 billion has now turned over 90% into crypto assets, which could have significant implications: 1) Trump's crypto asset proportion has jumped from 1% to 90%, similar to the wealth accumulation paths of early Bitcoin and Ethereum holders; 2) This rapid depreciation of non-crypto assets may occur globally in the future; 3) If the TRUMP token retains its value, it may trigger political and business celebrities to follow suit and issue personal tokens. He suggested that Trump could resolve potential conflicts of interest through an airdrop scheme: at the current valuation, airdropping $100 worth of locked TRUMP tokens to 77 million supporters would only require $7.7 billion, and even increasing it to $500 per person would still leave over $20 billion. Balaji believes this scheme could not only establish a new "president-citizen" relationship but also provide a public opinion basis for Trump to promote crypto-friendly policies. He also pointed out: Meme coins are zero-sum lotteries; they do not create wealth. Every buy order merely matches with a sell order. After the initial surge, prices will eventually plummet, and the last buyers will lose everything. Considering the platform's cut, meme coins are essentially negative-sum.

• Danielle Brian, Executive Director of the Project on Government Oversight, stated: Meme coins are often unrelated to any underlying business, making them highly speculative for investors, while potentially yielding substantial profits for founders. "Any actions taken by the Trump Organization to indicate their concern about potential conflicts (especially involving foreign governments) seem to completely undermine their efforts." Other groups expressing concerns include the nonprofit Campaign Legal Center and the Citizens for Responsibility and Ethics in Washington, which sued Trump during his first term for violating the constitutional prohibition against foreign gifts and emoluments but was unsuccessful. Campaign Legal Center General Counsel Kedric Payne stated, "The obvious distinction with cryptocurrency is how quickly you can obtain windfall profits."

• Ki Young Ju, CEO of CryptoQuant, posted on X: "Social influence will soon be measured by market cap rather than fan count. Trump's issuance of the coin yesterday marks this shift. Unless someone stronger than the president intervenes, this is inevitable. As victims emerge, the chaos will affect the law—this is the saddest part." "Trump is unlikely to fulfill his memecoin promises. He is more likely to use it to increase his net worth and reward loyal supporters and colleagues."

• Anthony Scaramucci, founder of SkyBridge Capital: This is detrimental to the industry and compares it to the level of corruption of former Ugandan President Idi Amin.

• Ben Meiselas, co-founder of Meidas Touch: Trump should focus on more pressing matters.

• Dave Portnoy, founder of Barstool Sports: This matter is similar to the alleged pump-and-dump scheme of meme coin HAWK by influencer Haliey Welch.

• Coffeezilla, a cryptocurrency detective on YouTube: This release is a "historically stupid act."

• Bitcoin bull Anthony Scaramucci: Warned his one million followers on X not to "delude themselves" about the launch of Trump's official meme coin.

• Bitcoin Magazine, the organizer of the Trump Bitcoin Conference, stated on social media that TRUMP is a shitcoin. Bitcoin Magazine was a well-known pro-Trump media outlet during the election and invited Trump to speak at its official Bitcoin 2024 conference, where Trump announced plans to launch a Bitcoin strategic reserve, ensure that the U.S. becomes the world's cryptocurrency hub and Bitcoin superpower, and fire the SEC chairman, initiating a crypto-friendly policy for the Trump administration.

• Lawyer David Lesperance pointed out: The elected president launching a meme coin violates the provisions in the U.S. Constitution aimed at preventing foreign influence on American government officials. "In the past, the elected president Trump launching his meme coin, TRUMP, would be seen as a clear violation of the Foreign Emoluments Clause in Article I, Section 9, Clause 8 of the U.S. Constitution." "Given that TRUMP can easily be purchased by foreign individuals or governments, this seems to violate this clause."

3. Will Trump's meme coin help him reach the top of the wealth rankings?

Crypto KOL Conor posted on X, stating that based on the holdings of the Trump family team, if he wants to surpass those on the Forbes billionaire list, the target prices for TRUMP are as follows: Reach $118: Surpass Michael Bloomberg; Reach $145: Surpass Bill Gates; Reach $203: Surpass Mark Zuckerberg; Reach $225: Surpass Elon Musk; Reach $270: Become the world's richest person.

On January 19, "Trump launches virtual coin, surges 1250% during trading" ranked 13th on Baidu's hot search list, and "Trump's wealth skyrockets by $4 billion overnight" ranked 40th on Weibo's hot search list. Related searches on Weibo noted that "the cryptocurrency president Trump saw his net worth soar to $28 billion overnight, thanks to the launch of the virtual coin 'TRUMP', which increased his estimated net worth by 400%."

Within just 24 hours of Trump's issuance, its market value soared to an astonishing $4.8 billion, with a fully diluted valuation reaching $24.3 billion. This figure not only set a record for meme coins but also indicated its potential to shake the dominance of Dogecoin in the meme coin space. To many, the president's launch of a meme coin is unprecedented, but upon closer examination of Trump's brand development and utilization over the years, it is not surprising. From Trump University to Trump Hotels, Casinos, and even NFTs, this president has long been accustomed to monetizing through his personal brand. The difference this time lies not in the strategy but in the medium—the ironic fact is that all of this stems from the current regulatory environment.

4. Is the meme coin MELANIA launched by Trump's wife reliable?

Melania Trump stated on social media early in the morning that people can now buy the meme coin MELANIA. However, according to Unusual Whales, the official website and domain for Melania's meme coin MELANIA were created just yesterday.

Ryan Selkis, a loyal Trump supporter and founder of Messari, publicly called on Trump on social media, suggesting he fire the personnel who recommended launching the Melania project today. Selkis pointed out the following issues with the project: The project team lacks professional competence; it could lead to significant economic losses and damage to reputation; project decisions did not adequately consider Trump's interests.

According to the Melaniameme official website, the MELANIA token adopts a significantly different token economic model from TRUMP. The token distribution plan is as follows: 35% team share, 20% treasury, 20% community, 15% public distribution, and 10% liquidity. In terms of unlocking mechanism, the MELANIA team share only needs to be locked for 30 days, while TRUMP requires a lock-up of 3 years. The MELANIA team share will unlock 10% (3% of total supply) on the 30th day, and then the remaining share will be unlocked linearly over the next 2-13 months, approximately unlocking 2.25% of the total supply each month until fully unlocked in the 13th month.

According to on-chain analyst Yu Jin's monitoring, the MELANIA coin launched by Trump's wife had a 5-hour FDV of $10 billion, but the values regarding the team unlocking portion in the MELANIA token distribution appear to be erroneous. The official website states, "MELANIA total supply is 1 billion: 35% team, 20% treasury, 20% community, 15% public distribution, 10% liquidity," but only the 35% for the team has unlocking rules written, while the others do not. This may imply that 65% of MELANIA's circulation could be available. "The MELANIA team portion will start unlocking in a month and will be fully unlocked in 13 months," but according to the distribution chart provided on the official website, the team is allocated 35%. However, based on the values in the unlocking rules below, it seems to be calculated at 30%.

According to on-chain analyst @ai_9684xtpa's monitoring, regarding the liquidity of the MELANIA token, as of now, the DEV address has added 129 million tokens of single-sided liquidity to the MeteoraMELANIA/USDC pool, and the token economics indicate that 10% of the tokens will be used for LP (i.e., 100 million tokens); currently, there are 9.64 million MELANIA and 275 million USDC in the pool, with a TVL of $393 million. Regarding chip distribution, the DEV address has distributed 870 million tokens to five addresses, three of which have not taken any action, while addresses 7Wk1V…xdMkA and 3XKsc…t6uKu are also executing liquidity addition actions.

5. Trump's family project is popular; WFLI will restart sales after selling out

On January 20, according to the official website, the pre-sale of the Trump family crypto project World Liberty Financial (WLFI) has sold out. However, after selling out, the Trump crypto project WLFI announced on social media that it has completed its task and sold 20% of the token supply. Due to high demand and attention, it has decided to reopen 5% of the token supply. The team is working hard to restart sales.

As expected, WLFI restarted sales just two hours later.

According to on-chain analyst @ai_9684xtpa's monitoring, with WFLI sold out, the on-chain holdings of World Liberty Financial (WLFI) have soared to $235 million, with the top three assets being subscription assets: ETH: $109 million; USDT: $63.23 million; USDC: $55.16 million; the ETH holding has increased to 33,631 tokens. It is worth noting that most of these are from WFLI public subscriptions, with only 12,601 tokens being actively purchased; currently, the institution has cumulatively purchased 24,433 ETH (costing $3,379), and 11,832 tokens have been deposited into Coinbase for unknown purposes.

The Trump family project WLFI has spent a total of $48 million to buy 14,403 ETH in the past 11 hours. Trump's son Eric Trump retweeted a tweet about World Liberty (WLFI) purchasing a large amount of ETH on X, stating, "Wait and see what they will do tomorrow."

In addition, World Liberty has shown great interest in ENS domains: Around noon today, the World Liberty multi-signature address purchased the domain 9290.eth; 10 hours ago, it purchased the domains WorldLiberty.eth, trumpcoin.eth, erictrump.eth, and barrontrump.eth.

As of the time of publication, according to CoinGecko data, TRUMP has increased by 47.3% today, currently priced at $45.39.

MELANIA has increased by 8.0% today, currently priced at $8.02.