President Donald Trump rewarded top investors in one of his cryptocurrency projects with a swanky dinner, an event that showed the ascendance of an emerging financial industry.
Some 220 of the biggest investors in the $TRUMP meme coin were invited to Trump's luxury golf club in Northern Virginia Thursday evening, where they dined on filet mignon and halibut. According to participants' posts on social media, Trump spoke for about half an hour before dancing to the song “YMCA.”
After feeling unfairly targeted under President Joe Biden, the crypto industry has quickly become a powerful political force, donating huge sums to help Trump and friendly lawmakers. The U.S. Senate is advancing key pro-crypto legislation while bitcoin prices soar.
“I’m a big crypto fan,” Trump told reporters aboard Air Force One during last week’s trip to the Middle East. “I’ve been that from the beginning, right from the campaign.”
White House press secretary Karoline Leavitt said the president is attending “in his personal time.” The White House has also said it has nothing to do with Trump's meme coin.
However, even some pro-Trump crypto enthusiasts worry that the president's personal involvement may be undermining their efforts to establish credibility and stability for the industry.
Crypto executives “would much rather that” the president would work to help “pass common-sense legislation and leave it at that,” aid Nic Carter, a Trump supporter and partner at the crypto investment firm Castle Island Ventures
As the president uses crypto as a platform to make money for his brand in unprecedented ways, it's also creating an opportunity for potentially shadowy buyers to use the anonymity of the internet to buy access to the president. The lack of transparency was evident on a poster board at the dinner, where participants signed a ranking of top investors. Some used their real names; others used pseudonyms.
Three days before Trump took office on Jan. 20, he announced the creation of the $TRUMP meme coin.
Meme coins are the crypto sector’s black sheep. They are often created as a joke, with no real utility and prone to extremely wild price swings that tend to enrich a small group of insiders at the expense of less sophisticated investors.
The president's meme coin is different, however, and has a clear utility: access to Trump. In addition to Thursday's dinner, the top 25 were invited to a private reception with the president, with the top four getting $100,000 crypto-themed and Trump-branded watches.
Trump’s meme coin saw an initial spike in value, followed by a steep drop. Its creators, which include an entity controlled by the Trump Organization, have made hundreds of millions of dollars by collecting fees on trades.
First lady Melania Trump has her own meme coin, and Trump’s sons, Eric and Don Jr. — who are running the Trump Organization while their father is president — announced they are partnering with an existing firm to create a crypto mining company.
The Trump family also holds about a 60% stake in World Liberty Financial, a crypto project that provides yet another avenue where investors are buying in and enriching the president’s relatives. World Liberty has launched its own stablecoin, USD1. The project got a boost recently when World Liberty announced an investment fund in the United Arab Emirates would be using $2 billion worth of USD1 to purchase a stake in Binance, the world’s largest cryptocurrency exchange.
Stablecoins have values pegged to fixed assets like the U.S. dollar. Issuers profit by collecting the interest on the Treasury bonds and other assets used to back the stablecoins.
Many top crypto backers were naturally wary of traditional politics, but gravitated toward Trump last year. They bristled at how Biden's Securities and Exchange Commission aggressively brought civil suits against several major crypto companies.
Trump has signed executive orders promoting the industry, including calls to create a government bitcoin reserve.
In March, Trump convened the first cryptocurrency summit at the White House.
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