Trump's meme coin: monetizing presidential influence, Blockon-chain political corruption

This article was inspired by Demetri Kofinas’ recent appearance on Grant Williams’ excellent podcast, where he expressed a negative view on political meme coins (memecoins), as well as Arthur Hayes’ recent and somewhat positive article on political meme coins, ‘Zero-Knowledge Proof’.

First, we explain Dmitri’s view, that is, the shamelessness and absurdity of the Trump meme coin.

This is completely insane. You are the President of the United States! It used to be the most prestigious position in the world, working in the Oval Office was an incredible privilege, an opportunity to bring about change. You are over seventy years old, this is an opportunity to influence the world, leave a legacy, and change people’s lives. And yet you are launching a meme coin!

The launch of the Trump meme coin is particularly disturbing, as Trump was elected on a platform related to national rejuvenation. So, when he took office, the first thing on inauguration day was to launch a meme coin. This is simply a heavy blow to the stomach.

Meme coins, at least to some, represent the dirtiest, most useless, and dumbest aspects of the cryptocurrency ecosystem, which itself has gained a notorious reputation for scams, and this reputation is not entirely undeserved. Meme coins are an extreme example of financial absurdity, speculative bubbles, and greed. Perhaps it is somewhat understandable that teenagers are interested in such things, or that a disgraced Nazi rapper would dabble in meme coins. Yet, Mr. President! How did we get to this point? How can a president escape unscathed politically and legally from all of this?

Trump is not just a madman, or a freak accident or random event. Trump is the result of decades of bad policies and blatant corruption by our political leaders. As Dmitry said, when people question $TRUMP, there is always someone who will say:

“Look at Biden, look at Hunter Biden. He’s on the board of Burisma. What does he understand? Biden got him in.”

Grant Williams seems to agree with this view, mentioning the lies about Iraq’s weapons of mass destruction (WMD) in 2002 and the Global Financial Crisis (GFC) in 2008 as other factors that led to a massive loss of public trust in the political system, enabling $TRUMP to become possible.

**Therefore, when no weapons of mass destruction were found, and the fact that the entire invasion was completely unnecessary really came to light, there may be enough high-level and powerful people who are hard to escape blame, and the matter was hastily covered up, nothing was done, and no one was punished. Yes, we conducted an investigation, but it was just a cover-up of the truth. So people feel angry, because they feel… no matter how you look at humanity, **

Not bearish, but cynical

Grant continues to discuss how the loss of this trust leads to the loss of moral values. In his view, now everything is about greed and making money in speculative bubbles. Rather than saying he is bearish on these bubble markets, it is more accurate to say that he has a more widespread cynicism towards Western values.

“This is very interesting, about the idea of ​​being bearish when the market is rising, going back to 2008, and the lack of consequences. I think this ‘bearish’ idea has become clearer to me personally now. And it’s not about being bearish on the market. This is bearish about society. This is bearish about what happens when we reach the kind of moral vacuum you mentioned. The idea is that if ‘digital rise’ becomes the only important thing, it will lead to OnlyFans, and all these terrible women flaunting how many men they can sleep with in a day on the Internet, and feeling proud of it, all these things for attention. Look at those so-called ‘internet celebrities’, this is a complete moral vacuum.”

“I think I am just starting to understand what my ‘bearish’ really means, because over the years I have been investing, and I am not sitting on a pile of gold and canned food waiting for doomsday. For me, this is an attempt to discuss something other than what will rise tomorrow. And this is important to me. Because there are already enough places talking about ‘digital rise’, but not so many places where you can hear meaningful conversations like yours, discussing meaningful topics, instead of ending with ‘So in summary, there is a three-letter acronym here that you need to buy to make money from this conversation’.”

Dmitri later agreed with Grant and also expressed negative views on cryptocurrencies.

I don’t mean to excessively criticize cryptocurrencies, but…

**In the cryptocurrency industry, experiencing this unique experience is indeed touching. All the smart people I know, as long as they have made money in this industry, they know that it’s almost all a scam, almost all a pyramid scheme, almost all driven by a pyramid model. If you stay in the cryptocurrency circle long enough, you will remember that most of these things were really believed to be useful. Maybe in the end they will indeed be useful— as long as enough funds are invested and sufficient government regulatory support is obtained. Blockchains and other distributed ledger technologies (DLTs) can indeed achieve certain applications in the financial field. But in my opinion, the amount of capital and wealth generated so far is not enough to prove their rationality. I am worried, and have always publicly expressed this concern, about what this means for our economic success in the long run. What are we doing if we put all our efforts and capital into an economic sector that can only produce limited returns? The Chinese people don’t do that.

All politicians should have MemeCoin

Arthur Hayes, Chief Investment Officer of Maelstrom, has a more positive view on $TRUMP. In his recent article, he explains how meme coins are leading us into a new political era - a more competitive and dynamic era. In this era, emerging political leaders can raise funds for their campaigns by issuing meme coins, enabling them to enter public office and get rich at the same time. The price of meme coins will reflect the political fortunes of the relevant politicians.

Like Dmitri and Grant, Arthur also mentioned Hunter Biden’s corruption issues, but he explained that meme coins actually improved the situation, allowing politicians to profit from public office in a more transparent manner.

“This is much better than the Biden family filling their pockets through a series of secret payments from foreign companies to various super-secret corporate entities. Of course, if the person delivering the cash is an addict, then these should have been super-secret.”

Arthur’s point is of course correct technically. Transparency is a good thing, so transparent grassroots corruption is better than secretive top-down corruption from large corporations or Ukrainian natural gas companies. But with the emergence of meme coins, the ‘veil has been lifted.’ Under Biden’s corruption, perhaps half the country can pretend everything is fine. And now, everyone knows the system is corrupt, and everyone knows that others know. This may lead to more political turmoil. This is undoubtedly a bad thing! No matter how obvious it is that a certain ‘addict’ in the US knows nothing about the Eastern European energy industry, some people just can’t see it. Whether it’s Twitter blocking private messages on this topic or simply turning a blind eye, some people can pretend that the government is serving the people. And now, everyone knows, and everyone knows that others know. To some extent, the rules of the game have changed.

Trump allocated 80% of Trump Coins to himself, a move criticized as a symbol of corruption. However, as Arthur mentioned, for other politicians, this issue can be addressed.

“The simplest way is to distribute 100% of the tokens at issuance. Then, if politicians want to believe in themselves, they have to enter the market at the same price as everyone else.”

Conservative View on the Price of Meme Coins

As for whether the price of political meme coins should reflect the political career or popularity of politicians, Arthur’s view is very simple:

**People buy $TRUMP because they want to be part of the Trump supporter community, or because they believe Trump will be more popular in the future. That’s it. There is no need to understand any complex economic or financial theories here. You don’t need to know algebra, basic calculus, statistics, or probability theory. You just need to think and feel like a passionate human being. Therefore, anyone can understand what gives political meme coins value.

We tend to take a conservative, boring, traditional, value investor type of view, which may be closer to Grant and Dmitry’s position. Why should the price of meme coins follow the popularity of a politician? Isn’t this just a stupid speculative game? Prices will definitely deviate significantly from political reality.

“Vote for me, I don’t have any meme coins”

Rest assured, we do not believe in a dystopian political future where every politician would need to have a meme coin to have a chance at winning elections. In such a future, a new generation of politicians could emerge with ‘no meme coin’ as a unique selling point. These politicians could claim that their candidacy is driven by the right reasons, not for personal enrichment but to help the people.

Trump and his supporters have been promoting DEI (diversity, equity, and inclusion) vigorously. Today, criticizing DEI has become the simplest path to gaining support and the most obvious entry point. But has DEI really become so widespread that it is causing lasting damage to economic productivity? We don’t think so. Perhaps a bigger economic issue is that people dream of getting rich quickly through speculative financial instruments (such as meme coins). Why work hard from nine to five when you can speculate and get rich at home, and easily misallocate capital to political finance (PoliFi)?

Trump’s Economic Revival Plan

In addition to launching meme coins, Trump also plans to launch a series of exchange-traded funds (ETFs), including two Bitcoin-related ETFs:

1. Truth.Fi Bitcoin Plus ETF
2. Truth.Fi Bitcoin Plus SMA

This is another obvious opportunity for corruption. What will Trump discuss when he meets with Sheikh Mohammed bin Zayed of Abu Dhabi next time? Perhaps Trump will ask him to redeem his $437 million investment in BlackRock’s $IBIT and instead invest in Trump’s Bitcoin ETF. This is the so-called art of the deal.

As for whether the optimism that Trump has succeeded in inspiring, and whether the strategy developed by making corruption more open and transparent will actually “make America great again,” time will tell. However, call us cynics, we think Trump’s meme coins or other cryptocurrency-related schemes could be a hindrance rather than a help.