Trump’s Memecoin – Political Corruption On The Blockchain
Abstract: In this short political rant of a piece, we look at Trump’s memecoin and the sheer absurdity of it. We try to examine how Trump appears to have gotten away with such a blatant display of selfish financial lunacy. We discuss differing views on political memecoins from Arthur Hayes to Grant Williams.
The Office Of The President
This piece is inspired by Demetri Kofinas’ appearance on the excellent Grant Williams podcast a few weeks ago, with a negative view on political memecoins and a recent fascinating and somewhat positive article on political memecoins by Arthur Hayes, entitled Zero Knowledge Proof.
We start by articulating Demetri’s views on the brazen outrageousness of Trump’s memecoin.
It’s totally insane. You’re President of the United States. This used to be the most glorious office in the world, an incredible privilege to sit in the Oval Office, an opportunity to make change. You’re in your 70s, to have an impact, to have a legacy, to change people’s lives for the better. And you’re launching a memecoin!
And the launch of Trump’s meme coin, I think was especially disturbing, because Trump was elected on a certain platform that had to do with national rejuvenation. So when he came into office, and the first thing he did on an inauguration day was to launch a meme coin. It was like a gut punch
Memecoin’s are regarded, by some at least, as the sleaziest, most useless and stupid part of the crypto ecosystem, an ecosystem already tainted with a scammy reputation, and justifiably so. A memecoin is the most extreme example of financial absurdity, speculative bubbles and greed. Maybe it seems logical that kids would be interested in the idea or perhaps a disgraced Nazi rapper. However, the president of the United States! How on earth did we get here and how is the president getting away with it, both politically and legally?
Trump is not just an orange madman that came out of nowhere as a sheer accident or random event, Trump is the result of decades of poor policy and blatant corruption from our political leaders. As Demetri puts it, when people question $TRUMP, one can always say:
Look at Biden. Look at Hunter Biden. He was on the board of Burisma. What did he know? Biden put him there.
Grant Williams appears to agree, and mentions the lies about WMD in Iraq in 2002 and the 2008 GFC as other factors, which caused a mass loss of trust in the political establishment, a loss of trust which made $TRUMP possible.
And so when the lack of WMD, when the unnecessariness of this whole invasion truly came to light, enough high-powered well-placed people were likely culpable that it just got brushed under the carpet and nothing was ever done about it. And nobody was punished. Yes, we had inquiries, but they were a whitewash. And so people were angry because they felt like… think what you will about humankind,
Not Bearish, Just Cynical
Grant goes on to talk about how this loss in trust, has resulted in a loss of moral values. As he sees it, now everything is about greed and making money in speculative bubbles. Instead of being bearish about these frothy markets, Grant has moved on to wider cynicism about western values.
It’s funny, this idea of being bearish about markets as they climbed, coming back to 2008 and what happened after that and this lack of consequence. I think this idea of being bearish is coming more into focus for me now personally. And it’s not about markets. It is a bearishness for society. It’s a bearishness for what happens when we reach that moral vacuum that you talk about. This idea that if number go up becomes the only thing that matters, that’s what leads to OnlyFans and all these God awful women putting themselves on the internet proudly boasting of how many men they can sleep with in a day and all this stuff for attention. And you talk about influencers, it is a complete and utter moral vacuum. And I think I’m only now starting to understand what my own bearishness was really all about because it’s not that I haven’t invested in all these years. It’s not that I’ve just sat there on a pile of gold and canned food. For me, it’s been an attempt to try and talk about something other than what’s going to go up tomorrow. And that to me has felt important. It’s felt that there are plenty of places where you can talk about the number going up. There aren’t so many places where you can listen to people like you have meaningful conversations with people about meaningful subjects that don’t end with a, so just to distill that, here’s a three-letter acronym that you need to buy to make money out of this conversation.
Demetri then agrees with Grant, also expressing a negative view on crypto.
I don’t mean to harp on crypto here, but it’s just such a unique experience to be in an industry where everyone who’s smart, that I know who’s in it, who’s made money, knows that almost all of it is a scam, that almost all of it is a pyramid scheme. That it’s almost all pyramid driven. If you’ve been in crypto long enough, you remember what it was like when people actually believed that most of this stuff was going to do something. Now maybe it eventually will. You throw enough money at something, you get enough government regulation to support it. There are ways to use blockchain and other DLTs to certainly do certain things in finance, but the amount of capital, the amount of wealth that’s been generated in my opinion, it just doesn’t justify. And I worry about, and I have worried, and I’ve been open about this, I worry for the long term, what does that mean for the success of our economy? If we’re expending all this effort and capital in an area of the economy that’s only going to produce so many gains in return, of real wealth and the economy, what are we doing and is that what the… The Chinese aren’t doing that.
All Politicians Should Have Memecoins
Maelstrom CIO Arthur Hayes, has a more positive view on $TRUMP. In Arthur’s latest essay, he goes on to explain how memecoins could move us into a new era of politics. A more competitive and dynamic era, where budding political leaders could launch a memecoin to fund their campaign and get into office and get rich at the same time. With memecoin prices tracking the political fate of the politician in question.
Like Demetri and Grant, Arthur also refers to Hunter Biden’s corruption, but explains how memecoins actually improve the situation, allowing politicians to profit from office in more transparent ways.
This is much better than how the Bidens feathered their nest through a raft of secret payoffs from foreign businesses to this or that super-duper secret corporate entity. Well, they would have been super-duper secret if the bag man wasn’t a crackhead.
Arthur’s view here is of course technically correct. Transparency is a good thing, so transparent grass roots corruption is better than obscure top down corruption from large corporates or Ukrainian gas companies. But with memecoins, “the veil has been lifted”. Under Biden’s corruption around half the country could go around pretending that everything was above board. Now everyone will know the system is corrupt and how absurd the financial system is, memecoins are out in the open. This could therefore lead to an even more politically volatile situation. This has got to be a bad thing! No matter how blatant you thought it was that an American “crackhead” knew nothing useful about the energy sector in Eastern Europe, some people just didn’t see it. Whether it was the success of Twitter blocking even private messages on the topic or just willful ignorance, some people got to pretend the government was running things for the people. While now everyone knows and everyone knows that everyone knows. To that extent, the game has changed.
Trump allocated 80% of the Trump coins to himself, something critics point to as a sign of corruption. However, as Hayes mentioned, for other politicians, this can be fixed.
The easiest way to remove this as a concern is for 100% of the tokens to be distributed at launch. Then, if the politician wants to believe in themselves, they enter the market at the same prices as everyone else.
Luddite View On Memecoin Prices
As for the view that political memecoins should track the careers or popularity of the politicians, Arthur’s view is that the situation is simple.
People buy $TRUMP because they want to become a member of a group of Trump supporters or they believe Trump’s popularity will increase in the future. That’s it. There are no fancy economic or financial theories to know. You don’t need to understand algebra, basic calculus, statistics, or probability theory. You just have to think and feel like a red-blooded human. Therefore, anyone can understand what gives a political memecoin value.
We tend to have an old fashioned, boring, traditionalist, value investor type approach here, probably more in agreement with Grant and Demetri. Why should the memecoin price follow the popularity of a politician? Surely it is all just a stupid speculative game and prices will deviate wildly from political realities.
Vote for me, I don’t have a coin
Rest assured, a dystopian political future, where every politician needs to have a coin to stand a chance of electoral victory is not likely in our view. New politicians could rise up, with a unique selling point of not having a coin. This new class of politician could claim they are in it for the right reasons, not to get rich, but to help the people.
Trump and his supporters have made a big noise about DEI. Being negative about DEI is now the easiest path to approval and the lowest hanging fruit issue to fix. But was DEI so prevalent that it did real lasting damage to economic productivity? We think not. Perhaps a far greater economic problem is that of people dreaming of getting rich quick by trading speculative financial instruments such as memecoins. Why work hard on a 9 to 5 job, when you can be a degenerate and make millions sitting at home misallocating capital into PoliFi?
Trump’s Economic Revival
In addition to launching a memecoin, Trump is also planning on launching a plethora of ETFs, including two Bitcoin ones: i. Truth.Fi Bitcoin Plus ETF, and ii. Truth.Fi Bitcoin Plus SMA. This is yet another opportunity for blatant corruption. What is Trump going to discuss in his next meeting with Sheikh Mohamed bin Zayed Al Nahyan of Abu Dhabi. Trump would probably ask him to redeem his $437m investment in Blackrock’s $IBIT and instead to invest in the Trump Bitcoin ETF. It’s the art of the deal.
As for whether the optimism Trump has succeeded in generating, alongside the strategy of making corruption more open and transparent, will “Make America Great Again”, time will tell. Call us cynics however, but we think the Trump memecoin or other cryptocurrency related endeavours could be more of a hindrance than a help.
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