The value of Donald Trump’s meme coin, known as $TRUMP, surged by over 50% on Wednesday following an announcement from its official website. The announcement revealed that the top 220 holders of the coin would be invited to a private gala dinner with Trump on May 22. Additionally, the 25 leading holders would receive invitations for an exclusive VIP reception and a special tour with the president.
After the announcement, the price of $TRUMP climbed to approximately $14.70, although it slightly dipped to $12.30 in early Thursday trading, according to CoinMarketCap. Despite the recent increase, the coin’s value remains significantly lower than its peak, which soared from around $6 to $75 prior to Trump’s inauguration in January. This spike has spurred criticism, with experts voicing concerns over potential conflicts of interest involving the Trump family amidst the launch of both his and Melania Trump’s meme coins.
Interestingly, the price spike came when investors anticipated a forthcoming process that would allow earlier investors to cash out their holdings. Normally, such “unlocking” periods tend to lead to price declines; however, the $TRUMP account announced a delay of 90 days for this process.
Meme coins, by their nature, are inspired by viral phenomena and typically possess no inherent utility, often witnessing a sharp decline in value after initial surges. For instance, a meme coin initiated by viral star Haliey Welch reached a valuation of $490 million before crashing to just $2.9 million.
Previously sceptical of cryptocurrencies, Trump now refers to himself as the “crypto president,” claiming to support the sector’s growth. He has made strategic moves to engage the crypto space, hiring David Sacks as a crypto and AI advisor and establishing a national stockpile of digital currencies, including Bitcoin.
The Trump family has increasingly engaged in cryptocurrency, with Melania launching her own meme coin and Trump and his sons forming a crypto platform named World Liberty Financial last year. Additionally, the Trump Media and Technology Group announced initiatives with Crypto.com to offer crypto-related investment products.
In a related context, the US Justice Department recently announced it would dissolve a unit that focused on investigating cryptocurrency fraud, signalling a shift towards a more deregulated environment for digital assets. Deputy Attorney General Todd Blanche indicated that enforcement actions would no longer impose regulatory frameworks on digital assets, suggesting a significant reduction in oversight. This decision has raised concerns among prominent congressional Democrats and watchdogs regarding the increased risks to both investors and the overall economy arising from the ongoing deregulation of the cryptocurrency sector.