The current President-Elect of the United States, Donald Trump, has caused much controversy in the crypto space after launching his Official Trump (TRUMP) meme coin on Solana (SOL) two days before the inauguration.
The announcement on January 17 through Trump’s Truth Social account stated that the token was for him and his “winning.” The initial speculation pointed towards a possible hack, but the confirmation came shortly after, with Trump becoming the first U.S. president to endorse a meme coin.
Critics raise ethical concerns
Like others, the TRUMP meme coin has been criticized for having no real-world application. Critics and analysts have pointed out that using the Trump administration’s position to endorse cryptocurrency is questionable.
YouTuber Stephen Findeisen, also known as Coffeezilla, criticized the timings of the project. In a Jan. 18 post, he called the launch of the coin ‘unethical’ and raised concerns with the reported 80% of the coins being distributed to Trump’s inner circle. Findeisen described the situation as ‘nasty work’ due to the risks of large losses for inexperienced investors.
Peter Schiff, an economist who has consistently dismissed cryptos, likened the coin to Bitcoin in sarcasm while making fun of it. Former Trump aide Anthony Scaramucci called it “corruption” and warned it may negatively impact the broader crypto market.
Crypto-influencer Max Schwartzman said that it is possible that Trump’s account was hacked, as the TRUMP COIN website has the same design as Trump’s previous NFT project. Others, like 0xCygaar, pointed out that the two have similar technical structures, which only added to the hype.
Explosive growth amid controversy
After the launch, the token only took 15 minutes to reach a market cap of $400 million. The launch also saw SOL, Solana’s native token, rise to an all-time high of $267 due to the buzz around the TRUMP token.
However, the TRUMP coin has soared and has recorded more than 12,000% adoption after its launch despite the backlash it has received. The token’s value reached close to $35 and then hovered around $29, taking the market capitalization to $5.98 billion. Successful traders have made a lot of money, with one of them reportedly making $50,000 to $1.1 million within a few hours.
However, doubts remain about the prospects of the token in the future. Currently, only 20% of the 1 billion TRUMP coins are in circulation with the remaining 80% to be released over the next 36 months.
At the moment, the first twenty holders possess 87.02% of the total token supply, which means only 12.97% remains for all other investors and traders. The developer wallet alone is estimated at about $15.5 billion, which raises questions about developers controlling and manipulating the market.
Some critics have claimed that this sort of ownership control weakens the token in question. Crypto analyst JRNY Crypto raised concerns about the lack of concrete information coming from Trump’s advisors to support the project.
The FOMO on the TRUMP token pushed many traders into action, causing a rise in the Solana price and an increase in its on-chain activity. Analyst Will Clemente pointed to the chaos, stating that traders have been dumping other assets to buy into the TRUMP phenomenon. However, some analysts have expressed concern that the fast pace may result in a quick drop.
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