Did Donald Trump pull a cryptocurrency rug pull just days before his inauguration?
With the launch of his very own meme coin $TRUMP on January 19, which skyrocketed in value only to plummet once Melania Trump‘s memecoin $MELANIA arrived, experts were worried. It’s just the kind of thing that feels like something he’d do, you know?
However, it’s not that simple — and it looks like a rug pull isn’t looking likely. Confused? We’ve got you.
What is a memcoin?
A memecoin is a form of cryptocurrency which is inherently linked to internet trends. Although it technically doesn’t have any economic or transactional value, they can become worth serious cashola when they hit virality. This is different to other coins like Bitcoin, Ethereum or Cardano because they have real-world value.
The most popular example of this is Dogecoin which is symbolically represented by that shifty-looking Shiba Inu dog (you know the one). Originally, the image of the dog became an NFT (non-fungible token) but then once the NFT was acquired, it was made into a cryptocurrency as a joke.
After a bunch of celebrities — including Elon Musk — referenced the currency, it soared in popularity. It is now the seventh most valuable cryptocurrency and is believed to have inspired the name of Musk’s new governmental wing, the “Department Of Government Efficiency” or DOGE for short.
Dogecoin’s inspired a host of other memecoins, despite the medium of a memecoin being incredibly volatile.
So, why did Trump launch one?
One of Trump’s driving points this election was to make the United States leading the charge in cyrpto. So, before he was sworn in, he launched two memecoins, one for him and one for Melania.
For Trump supporters, buying the coins was a way to show their support before the president-elect took the world stage. Meanwhile, for Trump, this was a way to capitalise on his viral popularity.
“Meme coins largely represent communities on the internet represented by a financial asset — they’re the tokenization of internet culture,” Joe McCann, CEO of digital assets investment firm Asymmetric told CBS News.
“Donald Trump is arguably the most popular person on the internet, so by launching a meme coin, members of his community can further gain proximity to him.”
According to New York Magazine, $TRUMP coin had a market cap value of $1 billion USD ($1.6 billion AUD). Two days later, right before the inauguration, it had risen to a full value of $72 billion USD ($115 billion AUD), making it one of the top 30 most valuable cryptocurrencies in the world — again, despite having no real world value.
Despite the value that the coin accrued, the official Trump memecoin website stated that the memecoin was not an investment opportunity.
“Trump Memes are intended to function as an expression of support for, and engagement with, the ideals and beliefs embodied by the symbol $TRUMP and the associated artwork, and are not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type,” said the fine print on the website.
However, this hasn’t stopped people from making some serious cashola using the $TRUMP coin, including Australia’s own shock-jock Kyle Sandilands who claimed to have bagged a cheeky $700,000 over the weekend from investing $10,000 in $TRUMP coin.
“Let’s say two or three in the morning. Trump launched his $TRUMP coin. I jumped in with $10,000 and I’ve made $700,000” he said.
“By the time I woke up, I was $700,000 richer.”
Plus, with 80 per cent of the coin owned by a company linked with the Trump Organisation, it is reported that Trump’s stake in the coin is worth approximately $58 billion USD ($94 billion AUD). That means that the majority of his net worth is now wrapped up in $TRUMP coin.
Some experts have seen Trump’s foray into the crypto space as a good thing for the future of crypto.
“The fact that a president is doing this brings some sort of legitimacy to the space, and I think just means that the industry is moving ahead in a way it hasn’t for the last 10 years,” said senior director at leading crypto market maker Wincent, Paul Howard, per Reuters.
What are the ethics of all this?
Despite his crypto venture being incredibly lucrative, experts worry that the $TRUMP and $MELANIA coin release could be a conflict of interest. Although Trump has stated that he will pass the management of his assets to his children, the ethical worry stems from his government’s plan to regulate the crypto industry and now, his own stake in that industry.
According to Danielle Brian, the head of watchdog group Project On Government Oversight, Trump’s foray into cryptocurrency is a
“a blatant financial conflict of interest on behalf of the president”.
“It is deepening his engagement in a world that raises real national security concerns,” she said, per Reuters.
What is a ‘rug pull’ and why were people accusing Trump of one?
Although Trump’s coin was doing extremely well at first, it dropped in value once Melania’s coin was announced. As a result, may worried that Trump and his team were orchestrating something called a rug pull.
A rug pull is a scam where a person or business pumps a heap of money into an asset — like a memecoin — to raise the worth of the asset, before selling shares and leaving the remaining shareholders with a worthless asset.
After Trump’s coin dropped significantly, users online accused the President of pulling a rug pull scam. Especially after crypto analytics platform Bubblemaps
However, it doesn’t appear to be the case so far. Although $TRUMP has declined from a high of $74.59 USD ($119 AUD) to $33.87 at the time of writing, the nature of the coin is that it’s incredibly volatile. Despite the drop, it’s still worth something.
While many people have their worries regarding the memories, another perspective is that the $TRUMP and $MELANIA coins will function like a social barometer, showing us the level of support that the couple holds.
For now, I guess we’ll just have to wait and see what happens.
The post ‘I Was $700K Richer’: What Trump’s New Memecoin Actually Means appeared first on PEDESTRIAN.TV .
