Memecoin frenzy before Trump Inauguration invites sharp reactions: Crypto President, cryptoequity, gambling

The Official Trump memecoin climbed up from the lows of Monday to a market capitalization of close to $12 billion on January 20, short of the earlier record high, ahead of the Inauguration of President-elect Donald Trump.

Several crypto asset analysts have raised the point of conflict of interest after President-elect Trump and wife Melania separately launched memecoins that evoked frenzied buying activity in the digital assets, while some have questioned if the world is entering an age of 'cryptoequity'.

Balaji Srinivasan, former CTO of Coinbase said the move has also opened the doors for startups to try and raise funds by issuing tokens as 'explicit cryptoequity'.

"Indeed, from a 'technical' perspective it’s far better to represent equities onchain. You can hold them in a wallet, price them with an API call, and track them on an explorer. You can also easily issue dividends, execute buybacks, and manage vesting schedules," Balaji said on his X handle, adding that the world may have 'finally enter the long-overdue age of the cryptoequity.' He added that founders should not lose sight of measures like lockups, as these conventions 'align' long-term interests of investors and founders.

The Official Trump memecoin climbed up from the lows of Monday to a market capitalization of close to $12 billion on January 20, short of the earlier record high, ahead of the Inauguration of President-elect Donald Trump. The Trump memecoin surges to as high as $75 on Monday afternoon, after debuting at $7 on Friday night.

Trump has hinted as executive orders aimed at reducing crypto-related regulations as well as to promote widespread adoption of digital assets, inviting the moniker of being the first 'crypto president'.

The memecoin launched by Trump was soon followed a Trump’s wife Melania unveiling a coin, which together stirred up interest in the cryptocurrency market, while raising concerns over conflict of interest. Bitcoin too hit a fresh high of over $109,000 on January 20, after a brief fall following the memecoin launches that soaked up liquidity from the asset.

Anthony Scaramucci, former White House Communications Director and SkyBridge Capital LLC founder said, "The day before inauguration as leader of free world and this is what Trump is focused on. Tells you everything you need to know."

Gabor Gurbacs, former Director of digital asset strategy at VanEck and founder of PointsVille said the memecoins “cost the US, the presidency and his family a lot of credibility,” and he needs to fire his crypto advisors.

The frenzied tide has raised all kinds of boats, with the market capitalisation of Fartcoin, a meme-driven cryptocurrency based on jokes rising to touch $2.4 billion. This is more than 1,200 companies on the Russell 3000 index, pointed out investor and chartist Charlie Bilello.

"...as with the uncensoring of X, there is an enormous range of new things that is now apparently permissible to do — some good and some bad. And a risk-tolerant community will surge into that space to explore what’s possible," added Balaji. One of his earlier posts had cautioned investors about memecoins, saying they should be approached in the same way as gambling.

Another founder and angel investor, Nikita Bier said, "The most important thing to understand about how the world is going to be different tomorrow: Everything will be legal." He said the 'financialization of everything' will be next biggest thing after AI, going forward, one that may effectively legalize gambling.

Reuters quoted Justin D'Anethan, an independent crypto analyst, asking a highly pertinent question, "Should public figures, especially those with such political clout, wield this kind of sway in speculative markets? That's a question regulators are unlikely to ignore."

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