US President Donald Trump has sparked fears among investors with his recent foray into cryptocurrency. In an effort to capitalize on his popularity, several copycat memecoins have been created and deposited into his digital wallet, raising concerns over the authenticity and legitimacy of these tokens.
The Financial Times analysis found that more than 700 copycat coins have been sent to Trump’s digital wallet in the past three weeks alone. Nearly 200 of these coins are named after Trump or family members but lack any connection to the president.
Critics warn that investors risk being duped by these imitators, as they often rely on speculation and lack practical use, making them highly volatile. Eswar Prasad, senior fellow at the Brookings Institution, stated that ordinary investors buying these copycat coins “just exposes them to enormous risk.”
The rapid creation of these memecoins is facilitated by a function in Solana, the blockchain underlying Trump’s memecoins, which allows users to dump new coins into another wallet without needing permission. This has led to an influx of tokens being made, with some crypto exchanges becoming overwhelmed.
Some notable examples of copycat coins include “OFFICIAL TRUMP,” “OFFICIAL MELANIA,” and “Trump King.” Others are more humorous, such as “POO COIN” or contain names of Trump’s family members, including Barron, Ivanka, and Eric.
Experts warn that the flood of memecoins is likely to lead to a bubble where investors lose money. Danielle Brian, executive director at the Project On Government Oversight, stated, “The copycats are drawing investor interest in something that…is clearly going to be the next bubble where people lose money.”
As the situation unfolds, it remains to be seen how Trump’s involvement with cryptocurrency will impact investors and the market as a whole.
Source: https://www.ft.com/content/831919a9-47b0-4ac3-bcdd-5154c27d9f9c