Trump's Support for Meme Coin Worries Crypto Industry Players

President Donald Trump’s standing in the cryptocurrency industry has been tarnished after he and his wife introduced meme coins, a move critics argue appears to be a questionable money grab that undermines efforts to legitimize digital assets.

The cryptocurrency industry, which felt unfairly targeted by the Biden administration and invested heavily in supporting Trump, is now looking for the new president's support to integrate crypto more deeply into mainstream financial systems. Trump has pledged to ease regulations and appointed pro-crypto officials to key government roles.

Since Trump’s victory, the prices of bitcoin and other digital assets have surged. A lavish “Crypto Ball” held on Friday before his inauguration sold tickets for thousands of dollars and featured a performance by rapper Snoop Dogg.

However, while the party was underway, Trump took to social media to announce the launch of his own cryptocurrency in the form of a meme coin, a move that soured the mood for many in the crypto community.

“I really was kind of bummed out when I saw it,” said Tom Schmidt, a partner at a crypto venture capital firm Dragonfly. “It just felt very grifty and cheap.”

Some crypto enthusiasts even joked on social media that they missed Gary Gensler, the recently departed chairman of the Securities and Exchange Commission, who was seen as the Biden administration's main crypto critic due to the SEC's tough stance on crypto companies.

Meme coins are considered one of the more chaotic and less regulated parts of the crypto world. They often begin as jokes with no real value but can skyrocket in price if enough people start buying in. Well-known examples include Dogecoin, with its dog mascot, and Fartcoin. Unfortunately, scammers have also used meme coins to artificially inflate their prices before cashing out, leaving unsuspecting investors holding the bag.

Some crypto fans celebrated the launch of Trump’s meme coin, causing its price to soar to over $70 each. However, the excitement faded quickly on Sunday when First Lady Melania Trump introduced her own meme coin. Like Trump’s coin, it experienced an initial spike in price, only to drop sharply afterward. By Tuesday afternoon, Trump’s meme coin was trading around $45, while Melania’s coin had fallen to about $4.

On Tuesday, Trump appointed SEC Commissioner Mark Uyeda as the agency’s acting chief, and Uyeda wasted no time announcing the creation of a new crypto task force aimed at putting the SEC on a more "sensible regulatory path." Trump has also promised to establish a U.S. bitcoin reserve and implement industry-friendly regulations to help crypto companies more easily tap into the broader financial market.

However, by tying himself so closely to meme coins, some crypto enthusiasts are concerned that Trump may damage his credibility and make it harder for him to push through meaningful reforms.

“Now, on the cusp of getting some liberalization of crypto regulations in this country, the main thing people are thinking about crypto is, “Oh, it’s just a casino for these meme coins,’” said Nic Carter, a Trump supporter and partner at the crypto investment firm Castle Island Ventures. “It does the opposite of validating us, it makes it look completely unserious.”