Trump's meme coin continues pattern of milking the presidency – and his supporters | Opinion

Some in the crypto world were disappointed Trump cashed in at that very moment when an ally in the White House could bring a sense of legitimacy to their endeavors.

Anyone familiar with the world of crypto knows that hyper volatility is a significant risk when investing in digital currencies, "non-fungible tokens" and "meme coins."

And anyone familiar with President Donald Trump knows he's a shameless huckster always eager to squeeze his supporters to cash in on his name.

Trump, perpetually scheming for a payday, picks occasions when the focus is on him to launch some new Trump-branded schlock. If you're talking about Trump for any reason, he's got something with his name branded on it to sell you at that very moment.

So it should have come as no surprise when Trump, on the Friday before his inauguration last Monday, started selling a digital token, known as a meme coin – as supporters were partying at the Inaugural Crypto Ball, just a half-mile from the White House.

But some players in the crypto world were dismayed and disappointed that Trump cashed in at the very moment that they were eager about an ally in the White House bringing a stronger sense of legitimacy to their endeavors.

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This is what it means to be allied with Trump. Anything that puts money in his pockets is a priority. Anything that advances the interest of his allies can wait.

Is Trump's coin just another crypto 'rug pull'?

Andy Baehr, managing director and head of product at CoinDesk, told me meme coins are "definitionally and unashamedly frivolous" without "any utility." CoinDesk is a website that reports on and indexes crypto products.

Trump's coin – known as $Trump – looks like a gaudy baseball card with his picture, the phrase "fight, fight, fight" and his signature. People in the past week have paid in a wildly fluctuating range for this odd digital keepsake, from about $6.50 on the evening it was introduced to nearly $73 on the day before Trump's inauguration. The price had dropped into the low $30-range by Friday afternoon.

Trump's wife, Melania, launched her own coin called $Melania the day before his inauguration. It was valued about $2.50 on Friday afternoon.

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Baehr noted that coins like this demonstrate a market for this kind of thing and create transaction fees across the blockchain networks that store them, helping the industry grow. But Trump's coin, he said, prompted this reaction in the crypto industry: "Just because you can, it doesn't mean you should."

"Our industry is trying very hard to demonstrate that it's serious, that it welcomes useful regulation, that it wants to be more regulated, that it wants to have serious conversations with regulators and legislators to help improve how finance works, how investing works, how capital raising works, how trading works," Baehr said. "And something like this, that is so public and so unavoidably top-of-fold headline, threatens to set back how seriously the conversation is taken."

The crypto industry has a derogatory term for get-rich quick schemes and Baehr heard it invoked – "rug pull." That means cashing in on a coin fast and then walking, or running, away.

Is Trump making money from his meme coin?

There was plenty of speculation about how much money Trump made on his new coin. Rob Hadick, a general partner at the crypto venture capital firm Dragonfly, told me Trump's stake in this "is very unclear" for now.

The $Trump coin website said 200 million of them were put on the market Friday and 800 million more will be put up for sale gradually over the coming three years.

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The president on Tuesday tried to play both dumb and triumphant about his new coin when asked at the White House if he would keep selling products for personal benefit as president.

"I don't know much about it, other than I launched it," Trump said about his new venture. "I heard it was very successful."

The fine print on the $Trump website notes that a company registered in Delaware in 2022, affiliated with Trump's family real estate business, is part owner of a new company registered this month in Delaware. Combined, the two companies own 80% of the coins.

Hadick sees $Trump buyers as a mix of crypto speculators and Trump supporters. Some may hope that Trump will add some sort of "utility" to the coin, he said.

Trump, during his presidential campaign, sold non-fungible tokens, known as NFTs, another kind of digital product akin to a baseball card. Buyers who sunk enough money into those digital products were rewarded last year with a dinner with Trump in Florida.

That's the utility. In politics, it's sometimes called "pay to play."

$Trump is exactly the kind of thing our president loves to do

And there's the problem. Trump needs to keep churning the attention machine to drive interest in the stuff he wants to sell his supporters.

David Materazzi, CEO of Galileo FX, a firm that develops automated trading software, told me the price of $Trump isn't tied to anything in the real world and is driven instead by "hype," often about what's being reported about Trump in the news.

"He thrives on controversy. If something is controversial and you ask Trump, do you want to do it, he's going to say yes," Materazzi said. "Controversy helps him. It doesn't do anything to him."

Could Trump court controversy just for the attention it brings to his coin, and the money that follows?

"He has a lot of people who are willing to follow him to hell," Materazzi told me. "I think that's the game they're trying to play."

Those people, in their ubiquitous red hats, will also be wearing clunky Trump watches and gold Trump sneakers on that long march. They may even be stock holders in Truth Social, Trump's social media platform that has seen some pricing volatility of its own.

Time for a reminder: Truth Social, regulated by the U.S. Securities and Exchange Commission, must periodically warn potential investors about obvious risks. Those SEC filings, as I wrote about last year, are a litany of losses, of Trump business flops where his brand, for all its brash bluster, emerged as a loser.Trump still did OK in the end. Do you really think he cares if you do as well, by investing in a coin he is selling but claims to know little about?