What Happened?
The official meme coin (TRUMP) launched by U.S. President Donald Trump has faced criticism not only for the potential conflict of interest related to his presidential position (including the proposal to host dinners for top holders), but also for Trump’s ambiguous and contradictory statements regarding whether he profits from it.
Despite the extreme volatility and controversy surrounding the price of Trump coin, freight technology company Freight Technologies Inc. (FRGT) has announced plans to raise funds through the issuance of convertible notes to purchase the coin, positioning it as a cornerstone of its digital asset strategy. This move caused its stock price to double at one point, indicating market speculation enthusiasm for cryptocurrency themes.
In contrast to more established and solidly grounded mainstream cryptocurrencies like Bitcoin, Trump coin, as a relatively new and less established meme coin, relies heavily on political relevance and market sentiment for its value, exposing investors to unique risks that are markedly different and higher than those associated with the more mature Bitcoin.
The Trump Meme Coin Storm: President Denies Profiting
Just days before his return to the White House (January 2025), U.S. President Donald Trump announced the launch of the official meme coin (TRUMP) named after him, which quickly sparked discussions on social media. However, this move has recently triggered multifaceted discussions concerning potential conflicts of interest, ethical standards, and market reactions.
In an interview aired on NBC’s “Meet the Press” on May 4, the host directly addressed the core issue, asking Trump how he responds to criticisms that he is profiting from his presidential position through the previously issued meme coin.
In response to this sensitive accusation, Trump initially provided a definitive denial, claiming he is “not profiting from anything.” However, when the host pressed further, explicitly pointing out the core of the question: “So you’re not profiting off of the cryptocurrency at all?” Trump’s response began to become intriguing. He first made a somewhat surprising admission, stating that he was not clear on the specifics: “I haven’t even looked.” He then shifted gears, offering an analogy to explain or justify the relationship between potential value growth and profits. Trump stated, “But I’ll tell you what. Look, if I own stock in something and I do a good job, and the stock market goes up, I guess I’m profiting.”
The TRUMP token was launched on January 17, just days before Trump’s inauguration on January 20, and it surged to $73.4 within two days. However, according to CoinGecko data, the token’s price quickly began to decline, recently trading around $11.35, a drop of nearly 85% from its peak. Nevertheless, at the end of last month, the Trump token saw a brief spike after the official website announced it would provide top holders with the opportunity to have dinner with Trump. In the interview, Trump appeared unaware of this recent surge and repeatedly inquired about the current value of the token.
Reportedly, companies associated with the Trump Organization, CIC Digital LLC and Fight Fight Fight LLC, together hold 80% of the total supply of 1 billion Trump tokens. Most of these tokens are locked and will be released gradually over the next three years (until 2028). According to a March analysis by the Financial Times, this meme coin project has generated at least $350 million in revenue through token sales and transaction fees.
Criticism and Ethical Concerns Regarding Trump Coin
Trump’s various cryptocurrency-related activities, particularly the issuance of this meme coin, have sparked widespread criticism. Coupled with Trump’s active stance on deregulating the cryptocurrency industry, opponents argue that this constitutes a serious conflict of interest. The proposal to “have dinner with the president” has drawn criticism not only from Democratic Senators Adam Schiff and Elizabeth Warren, who believe this could amount to “pay to play” corruption and have called for an ethical investigation, but even Republican senators have raised concerns about it.
In the interview, Trump reiterated that he would donate his presidential salary to the government, but when asked if he would donate personal cryptocurrency profits, he stated that he “had never considered it,” and countered whether he should also donate from real estate that might appreciate due to his presidency and good performance. At the end of the interview, Trump reaffirmed his support for the cryptocurrency industry, emphasizing, “I want cryptocurrency. I think it’s important because if we don’t do it, China will.” He claimed to want to “keep it away from China,” or else China would dominate this emerging industry. He also criticized the previous Biden administration for its “harsh crackdown” on cryptocurrency, but noted that it changed its stance for votes before the election.
Public Company’s Contrarian Investment in Trump Coin Sparks Market Attention
Despite the significant decline in the price of Trump coin and ongoing controversies, Houston-based Freight Technologies Inc. (FRGT) has announced a noteworthy plan. The company stated it would raise funds by selling convertible notes to purchase Trump coin, with an initial target of $1 million and a maximum potential raise of $20 million.
Convertible notes are a special type of “debt instrument” that can be imagined as a “promissory note” issued by the company to investors. If specific conditions are met in the future (such as the company undergoing the next round of equity financing, reaching an agreed-upon date, or other specific events), investors can choose not to require repayment from the company, but instead convert this debt into a portion of the company’s equity. In a press release, FRGT stated that this move makes it one of the first publicly traded companies to position Trump coin as a “cornerstone of a digital asset strategy.” Following this announcement, the company’s previously sluggish stock price more than doubled on Friday.
FRGT’s CEO Javier Selgas indicated that the purchase of Trump coin is intended to “advocate for fair, balanced, and free trade between the U.S. and Mexico.” This aligns with the trend of some public companies investing in crypto assets in recent years, such as MicroStrategy’s substantial Bitcoin purchases and the stock surges of Upexi Inc. and Cantor Equity Partners Inc. after announcing investments in Solana or transitioning to Bitcoin investment tools. However, compared to mainstream cryptocurrencies like Bitcoin, Trump coin has a relatively short history and a shallow foundation. Whether FRGT’s wager is a forward-looking digital layout or a high-risk market speculation, its ultimate effectiveness and impact will be a focal point of ongoing market attention in the future.
Reference materials: cointelegraph, bloomberg