Behind Trump's Issuance of Meme Coins: Conflicts of Interest and Regulatory Challenges

In the past few days, Trump's popularity has continued to ferment across various media. Many people have even shouted that the crypto ecosystem now only consists of Bitcoin and Trump.

The reason for such a statement, I believe, is partly due to the large participant base influenced by Trump.

Previously, Trump had issued his own NFTs on Polygon and Bitcoin, but those NFTs did not have as significant an impact as Trump has. The main reasons may be:

• The audience for NFTs is very limited, far less than meme coins, which theoretically allow all users with crypto wallets to participate;

• The liquidity of NFTs is not as good as that of meme coins, which allows participants to immediately cash out their gains or losses, having an immediate impact on the market.

On the other hand, the idea of a president issuing a coin breaks people's perceptions. Everyone is worried that the trend of the crypto ecosystem over the next four years will be highly tied to him alone.

Why is he so tightly bound?

In past U.S. administrations, although officials are appointed by the president, they often have considerable discretion. However, based on Trump's past style of governance, the discretion of the officials he appoints is likely very limited; anyone who does not meet his expectations can be replaced at any time— even the Secretary of State is not exempt.

Therefore, the future U.S. crypto policy can be said to basically be his policy.

Moreover, the person who truly makes the policy is highly unpredictable in his actions.

Finally, this person who influences the crypto ecosystem is now deeply involved in the ecosystem with significant vested interests and will affect all aspects of the crypto ecosystem for a considerable time.

I have always believed that the biggest driving factor for meme coins is emotion, and the duration of that emotion is very limited.

Since Dogecoin, among all meme coins to date, only Dogecoin's popularity has lasted until now. All other meme coins (including SHIB, which created a myth back in the day) have gradually faded from public view as the collective sentiment has waned.

The reason Dogecoin's popularity has lasted until now is also due to Musk's continuous "endorsement" that has brought it to this point.

The reason Musk's endorsement continues to be effective is fundamentally because he has achieved remarkable progress and impressive results in several disruptive tech industries and occasionally hints at linking the commercial dividends of these industries to Dogecoin.

Now, the story of Musk endorsing Dogecoin is about to be replayed with Trump endorsing Trump.

However, the endorsements of the two are quite different:

Musk's endorsement at most shows people the possible prospects and potential narratives of Dogecoin—he only influences Dogecoin, at most also Bitcoin, but has almost no impact on other areas of the crypto ecosystem.

But Trump's endorsement not only influences the possible prospects and potential narratives of Trump—he will affect the development of various fields within the entire crypto ecosystem because his personal views, his position, and the power he holds will influence the direction of U.S. crypto policy, such as:

• Bitcoin being included in the U.S. national reserves

• Compliance operations for crypto assets

• Issuance rules for crypto assets

• Tax issues related to crypto assets

• Staking issues for POS

…

We can easily list a long string of them.

What complicates matters is that he has issued his own meme coin, which will inevitably lead to significant conflicts of interest with the crypto ecosystem in many aspects:

A typical phenomenon is the seesaw effect between Trump and other crypto assets during this period: when Trump rises, other coins generally fall; when Trump falls, other coins recover and rise. Each of these fluctuations affects almost all participants in the crypto ecosystem.

In the future, when his crypto policy inevitably conflicts with the Trump token, how will he handle it?

If previously, the Trump coin brought widely circulated wealth effects and stories of getting rich to participants in the crypto ecosystem, I think what is more concerning moving forward is what kind of negative impact and emotional fluctuations the Trump coin will bring to the crypto ecosystem.

I am particularly worried that when the interests of the Trump token conflict with the overall interests of the crypto ecosystem, he will make clearly biased decisions, and such decisions will affect the entire crypto ecosystem and the regulatory attitudes of other countries towards the crypto ecosystem globally.