As a European who doesn’t own bitcoin, I enjoy a bit of schadenfreude when the cryptocurrency industry is really upset about something. And the latest bout of outrage is a doozy.
The virtual currency elites who saw Donald Trump as a crypto saviour are now upset over his recent multibillion-dollar Trump-branded memecoin sale. Investor Ari Paul called it “fleecing people for billions”; former Trump associate Anthony Scaramucci said it was dictator-level “corruption”; and ex-Coinbase Global executive Balaji Srinavasan called it a “lottery” with no wealth creation.
Of course, they’re right to take a dim view of the Trump memecoin’s blend of naked cash-grab, Maga cultism and pump-and-dump tokenomics.
Here is a man convicted of fraud whose idea of an eleventh-hour announcement before being sworn in as the world’s most powerful person was to promote the flogging of 20% of a token with no intrinsic value, minting billions out of thin air and leaving the remaining 80% sat on by insiders.
Melania Trump’s subsequent token launch — which coincided with a slide in her husband’s coin — doesn’t look much better. If stomach-churning price swings no longer scare us, the conflict of interest and cynicism should. What’s to stop foreign powers tapping into this grift to reduce the risk of tariffs?
Yet perhaps the crypto world’s pivot against Trump speaks to deeper anxiety about the sustainability of the broader digital-asset rally, which has seen bitcoin’s price gain more than 160% in one year amid wider institutional backing from the likes of BlackRock and the promise of friendlier regulation.
Below the surface, the speculative fervour for memecoins has been building for a while, with squirrel-themed token PNUT hitting a market cap of US$1-billion last year and Hawk Tuah girl launching a coin of her own (with disastrous results).
Crypto lemon
Trump’s latest squeeze of the crypto lemon could be the moment the entire market looks as frothy as it did in 2017 when cash poured into risky initial coin offerings or in 2022 when nonfungible tokens fetched millions. Bitcoin may aspire to be digital gold, but the last crash saw it tank 67% in a year.
It’s also rather convenient for crypto elites to suddenly display concern for the average punter when the Trump campaign showed little interest in prioritising financial stability or consumer protection. Was the president’s repeat sale of NFTs not enough of a clue? Or his support for the government HODLing bitcoin, which would put taxpayers on the hook for an asset that’s existed for less time than Pokemon cards? Or indeed the promise of friendlier regulation just as the courts rake through the debris of 2022’s $40-billion Terra crash?
Read: Trump pardons jailed Silk Road founder Ross Ulbricht
Trump’s stance has always suggested greater convergence between traditional finance and crypto, volatility be damned. Considering the interconnectedness of crypto markets and the impact of leverage on asset prices that can melt down as well as up, this means more systemic risk — and bigger potential crises.
Whatever one’s view of the value of cryptocurrencies — and even hardened crypto sceptics have to admit bitcoiners remain in the black despite the lack of everyday use cases — something about this moment feels like a story that won’t end well.
On top of the threat posed by Trump’s personal conflicts and the fact that his own supporters may be being bilked, the ultimate risk is of a monetary system so awash with bad money that it drives out the good.
“A president and an administration that push these reckless ideas can also decide, equally recklessly, that they want to interfere with the [Federal Reserve’s] responsible stewardship,” says University of California at Berkeley economist Barry Eichengreen. “Were they to do so, that would constitute a real risk to the dollar’s international role.” Let’s hope someone hides the memecoin matchbox soon. — (c) 2025 Bloomberg LP
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