What Happened?
The official meme coin (TRUMP) launched by U.S. President Donald Trump has faced criticism not only for its potential conflicts of interest associated with the presidency (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 volatile and controversial price movements of Trump coin, the freight technology company Freight Technologies Inc. (FRGT) has announced plans to raise funds through the issuance of convertible notes to purchase it, positioning it as a cornerstone of their digital asset strategy. This move caused its stock price to double at one point, demonstrating the market’s speculative enthusiasm for cryptocurrency themes. In contrast to more established mainstream cryptocurrencies like Bitcoin, which have a longer history and more solid foundations, Trump coin, being a relatively new and shallow-rooted meme coin, has its value heavily reliant on political associations and market sentiment, exposing investors to unique risks that are markedly higher than those associated with more mature cryptocurrencies like Bitcoin.
The Trump Meme Coin Storm: President Denies Profiting
Days before his return to the White House (January 2025), U.S. President Donald Trump announced the launch of an official meme coin (TRUMP) named after him, which quickly sparked discussions on social media. However, this move has recently triggered a multifaceted debate regarding potential conflicts of interest, ethical standards, and market reactions. In an interview on NBC’s Meet the Press aired on May 4, the host directly approached the core issue, asking how Trump would respond to criticisms that he is profiting from his presidential position through the earlier issued meme coin.
Confronted with 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 crux of the issue: “So you’re not profiting off of the cryptocurrency at all?” Trump’s response began to become intriguing. He first made a somewhat unexpected admission, stating he is not aware of the specifics: “I haven’t even looked.” He then shifted his tone and offered an analogy, attempting to explain or rationalize the relationship between potential value growth and profit. 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 surged to $73.4 within just two days. However, according to CoinGecko data, the token price soon began to decline, with recent trading values around $11.35, a drop of nearly 85% from its peak. Nevertheless, the Trump token briefly surged at the end of last month when the official website announced that top holders would have the chance to dine with Trump. Yet, during the interview, Trump seemed unaware of this recent surge and repeatedly inquired about the current value of the token.
According to reports, companies associated with the Trump Organization, CIC Digital LLC and Fight Fight Fight LLC, which is co-owned by CIC Digital, collectively hold 80% of the total supply of 1 billion Trump tokens. Most of these tokens are locked and will be gradually released over the next three years (until 2028). According to an analysis by the Financial Times in March, this meme coin project has generated at least $350 million in revenue through token sales and trading fees.
Criticism and Ethical Questions Surrounding Trump Coin
Trump’s various cryptocurrency-related activities, particularly the launch of the 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 of “dining with the president” has been criticized not only by Democratic Senators Adam Schiff and Elizabeth Warren, who believe it could amount to “pay to play” corruption and have called for an ethical investigation, but even Republican senators have also voiced criticism.
In the interview, Trump reiterated his commitment to donate his presidential salary to the government, but when asked if he would donate personal cryptocurrency earnings, he stated he had “never considered it,” retorting whether he should also donate the appreciation of real estate that may have increased in value due to his presidency and good governance. At the end of the interview, Trump again expressed his support for the cryptocurrency industry. He emphasized, “I want cryptocurrency. I think it’s very important because if we don’t do it, China will.” He claimed he wants to “keep it away from China,” or else China will dominate this emerging industry. He also criticized the previous Biden administration for “savagely attacking” cryptocurrency but changing its stance for votes before the election.
Public Company’s Counter-Cyclical Investment in Trump Coin Sparks Market Attention
Despite the significant decline in Trump coin’s price and ongoing controversies, the Houston-based freight technology company Freight Technologies Inc. (FRGT) announced a striking plan. The company stated it would raise funds through the sale of convertible notes to purchase Trump coin, initially targeting $1 million, with a maximum possible raise of $20 million.
Convertible notes are a special type of “debt instrument,” which can be imagined as a “promissory note” issued by the company to investors. Under specific conditions in the future (such as the company’s next round of equity financing, reaching an agreed date, or other specific events), investors can choose not to require repayment but to convert this debt into a portion of the company’s shares. FRGT stated in a press release that this move positions it as one of the first public companies to use Trump coin as a “cornerstone of digital asset strategy.” Following this announcement, the company’s previously lackluster stock price doubled on Friday.
FRGT’s CEO Javier Selgas stated that purchasing Trump coin is to “advocate for fair, balanced, and free trade between the United States and Mexico.” This move echoes a trend in recent years where some public companies invest in cryptocurrency assets, such as MicroStrategy’s large-scale purchase of Bitcoin, and Upexi Inc. and Cantor Equity Partners Inc. seeing stock surges after announcing investments in Solana or transforming into Bitcoin investment tools. However, compared to mainstream cryptocurrencies like Bitcoin, Trump coin’s short history and shallow foundation raise questions about whether FRGT’s gamble is a forward-looking digital layout or a high-risk market speculation; its ultimate effects and impact will remain a focal point of continued market attention.
References: cointelegraph, bloomberg