Donald Trump’s inauguration on 20th January was followed by a salad of
executive orders, including the ejection of the USA from the Paris climate accord, the termination of birthright citizenship, the renaming of the Gulf of Mexico to the Gulf of America, withdrawal
from the World Health Organisation (WHO), the enforcement of a two-sex gender policy, and more.
Trump 2.0 was always going to kick off with a menagerie of activity and unpredictability. In January 2017 the septuagenarian business mogul entered the White House an outsider and inexperienced politician – this time his power is consolidated and nigh-on
unfettered, with an inner circle populated by like-minded tycoons and party politicians.
The pro-crypto candidate
But not all the changes have been entirely unpredictable. President and First Lady Trump’s release of their own crypto coins (on
18 and
19 January, respectively) were almost written in the stars, when on the campaign trail the then President-elect began touting himself as the
pro-crypto candidate. These three words generated waves in the crypto market, causing bitcoin to hit a new all-time high – rising above
$75,000 in early November.
Just one month later, in early December, Trump
appointed former PayPal chief operating officer, David Sacks, as "White House AI and Crypto Czar", mandated to “guide policy for the Administration in Artificial Intelligence and Cryptocurrency, two areas critical to the future of American competitiveness,”
as he explained on his social media platform, Truth Social.
This marked a stark shift in the White House’s stance, particularly in the wake of Gary Gensler’s
departure as the chairman of the Securities and Exchange Commission (SEC), who was the Biden administration’s chief crypto adversary. Since being sworn in, Trump has named Mark Uyeda as the SEC’s acting chief, who in short time
launched a new crypto task force to set the SEC on a “sensible regulatory path.”
$Melania and $Trump: The market shockwaves
When, just before the inauguration came around, Melania and Donald Trump released their own digital currencies – $Melania and $Trump – the Trump Organisation made an estimated
$58 million in a single day in trading fees alone, revealed CNN. Commentators decried a glaring
conflict of interest, while the New York State Department of Financial Services issued a
consumer alert over “rapidly proliferating” meme coins that represent “exceptional risk of fraud and loss of funds.”
Goodwill within the crypto world, too, was
soured, with some stakeholders perceiving the move as a cash-grab, rather than an authentic attempt to support the fledgling industry: “Trump needs to fire his crypto advisors, from top to bottom,”
tweeted Gabor Gurbacs, founder of digital asset firm Pointsville.
Naturally, $Melania and $Trump have both been subject to extreme price volatility since their issuance. At the time of writing, the coins enjoy a
combined market cap of over $10 billion, though this tumbled from a peak of $16 billion just before the inauguration. As of 21st January, “Trump’s meme coin was trading at about $45, while the Melania meme coin was at about $4,”
reports the Associated Press.
The sale of the meme coins tokens was arranged by affiliates of the Trump Organisation,
CIC Digital and Fight Fight Fight LLC, which initially made 200 million $Trump tokens available online – with plans to neutralise any rug-pull concerns by committing to the issuance of 800 million more over the next three years. The official Trump coin
website stresses that a purchase of $Trump or $Melania are an expression of support as opposed to any real investment opportunity, investment contract, or security of any type. According to
Forbes, “the value of the 800 million locked tokens is theoretical considering they are not on the market, and it’s unclear how much Trump owns of that amount jointly controlled by CIC Digital and Fight Fight Fight.”
Ethical concerns have been raised around Trump’s majority ownership of the tokens, though his organisation has yet to comment on this. Gareth Rhodes, managing director at advisory firm Pacific Street, told
CNN in an interview: “Even meme coin enthusiasts are sceptical of projects where the majority of tokens are not held by a broader community and appear to be designed in way that disproportionately benefits insiders.”
The President and First Lady’s tokens have been labelled by some as meme coins, in reference to online jokes and trends which have no inherent value. The first ever meme coin, dogecoin, was launched in 2013, and sought to poke fun at the booming
world of bitcoin.
A tech-industrial complex
At the inauguration, Trump’s broligarchs Jeff Bezos, Mark Zuckerberg, Elon Musk, and Sundar Pichai (all owners of sprawling communications and media channels) could be seen seated in the first row – the second row populated by the governmental cabinet.
This decision, alongside Trump’s foray into cryptocurrency, is more than incidental: it is symbolic of the White House’s broader prioritisation of a tech/communications-industrial complex – of a kind President Dwight D. Eisenhower warned about during his
1961 farewell speech – that aims to reduce regulations of the sector, act as a vessel for foreign investment, and influence public policy.
Due to its technological underpinning, this will no doubt have deep implications for the interconnected ecosystem of financial services in the West; what those are, it is too early to say.