Trump's coin made the new president a multi-billionaire. The success of cryptocurrency smells of fraud
In a series of other things brought about by Donald Trump's aggressive return to the White House, the release of Trump's own cryptocurrency also emerged. It hit the market a few days before officially taking office and soon recorded a rocket rise in its value. However, circumstances smell like a bubble that may burst. However, it is a symbol of Trump's efforts to promote cryptocurrencies as investment tools.
Originally, Donald Trump was among the critics of cryptocurrencies, labeling them as a fraud. His argument at the time was that Bitcoin competes with the dollar, and the then ex-president himself did not perceive competition for the world's hardest currency positively. However, the year was 2021 and the new tenant at the White House sees the situation around cryptocurrencies differently.
The cryptocurrency market reacted relatively quickly to changes in attitudes and the subsequent victory in the autumn presidential elections of Donald Trump. The largest and most traditional cryptocurrency, Bitcoin, soon exceeded the record limit of 100 thousand dollars. Optimistic predictors believe that Trump's positive approach could mean a double value of Bitcoin by the end of the year.
The world of cryptocurrencies is hailing the positives, predicting a fall for Trump's coin
Trump has even entered the cryptocurrency market with his own platform. Trump's coin, as it is called, in the context of his taking office, rocketed upwards in value. The market-traded part of the currency rose from a starting price per piece of 6 dollars to 75 dollars in 36 hours, which is a fairy-tale appreciation of about 1,100%.
However, in the world of digital investments, even such appreciation may not necessarily inspire only enthusiasm. The coin quickly fell from its peak to values around 40 dollars. One of the reasons was the launch of Trump's wife Melania's coin, which began to compete with Trump's. By the way, the success of the coins also negatively influenced the value of Bitcoin.
"Pure positivity. The change of atmosphere from the Biden era, which was against cryptographic technologies, to the Trump era is great. Trump owning 80% and timing the launch a few hours before the inauguration is predatory and is likely to harm many people. Trump should rather focus on people than enrich himself or his team. It can be interpreted this way, but it's unclear if this will be the direction it's going to take. At this point, it looks like an FTX coin,"
The context on the X network was evaluated by cryptocurrency expert Nick Tomaino.
In particular, the comparison to FTX does not bode well for the new token under the aegis of the U.S. President. FTX collapsed in 2022 even though it was one of the most valuable cryptocurrencies closing in on Bitcoin. The cause were predatory practices in the background. The value of FTX was pushed up by insider activity, which was not confirmed based on time-tested value. The realization then meant the total collapse of FTX with an impact on the entire world of cryptocurrencies.
The background of Trump's mem coin does not inspire confidence
In the case of Trump's coin, only a small part of it (20%) is publicly traded and the rest is owned by Trump's company. An increase in value could be expected when it was introduced to the market shortly before his inauguration, and it is a big question whether it will be sustained in the longer term.
Trump's coin is among the so-called meme coins. About 50,000 thousand of these are circulating each year and are associated with a reminder of something specific. However, speculators are often behind them, who after a rise in price rapidly start selling and the price of the token falls down. Then new buyers can't be found, because the "reminder value" is already passé.
In this regard, meme coins work differently from their real counterparts in the form of coins and medals made of precious metals, the archiving of which over time increases their price. However, they are not the target of hasty sales.
Although Trump is accused of trying to personally enrich himself through the profit of public office through cryptocurrency, he himself at a press conference responded without much interest to the finding that digital coins he owns are actually worth many times more than the rest of his property. He glossed over the discussion by saying that he actually doesn't understand it. The mentioned equation may not hold for a long time.
Sources: author's article, NBC, forbes.com, cnn.com, investopedia.com, x.com, seznamzpravy.cz
