Trump's Meme Coin Is a Scam, But He Still Stands to Make Millions

Three days before his presidential inauguration, Donald Trump launched a meme coin, a type of cryptocurrency whose value is largely driven by social media and internet culture rather than any intrinsic value or functionality.

The coin, officially called $Trump, briefly ascended into the top 15 cryptocurrencies by market capitalization and attracted over a half-million buyers.

During a news conference on Jan. 21, 2025, a reporter asked Trump about the coin, questioning whether he intended to continue selling products that personally benefited him while being president.

“You made a lot of money [on $Trump], sir,” he told Trump, who seemed unaware of its meteoric rise in value.

“How much?” Trump asked.

“Several billion dollars, it seems like, in the last couple days.”

Over the following week, various publications claimed the meme coin had “ballooned [Trump’s] net worth” making him a “crypto billionaire.”

While it’s true that Trump stands to benefit handsomely from the meme coin and his other crypto ventures, the claims of Trump himself earning billions off it are exaggerated.

Funny money or filch?

Meme coins became popular in 2013 with the launch of Dogecoin, which its creators intended as a joke, poking fun at the many other seemingly useless cryptocurrencies that were emerging at the time. It was never supposed to be a popular investment. The creators even attempted to make it as undesirable as possible to ensure it wouldn’t.

Twelve years later, it remains in the top 10 cryptocurrencies and has inspired thousands of other meme coins to launch.

In 2025, it’s cheaper and easier than ever to launch and trade these tokens.

For example, all it takes to create a new coin on the website Pump.fun is a name, ticker symbol, description, image and the equivalent of roughly US$5 worth of cryptocurrency.

Moonshot, the crypto exchange that Trump’s meme coin website routes interested buyers to, allows users to sign up in as little as 10 minutes. They’re then able to purchase the Trump coin and a slew of other meme coins.

The vast majority of meme coins launched are dubious. Many are outright scams. For instance, in August 2024 the Instagram account of McDonald’s was hacked to advertise a meme coin named $Grimace in a nod to the fast-food chain’s purple mascot. After artificially inflating the price of the coin, the creators cashed out close to $700,000.

There are countless other scam coins that fly under the radar using the same dynamic: generate hype, pump the price and dump on investors.

Looking under the hood

So how much might Trump and his associates actually benefit from his new meme coin and, more broadly, the “free-for-all” attitude his administration is taking toward the crypto industry?

I study the gray area between participation and exploitation in crypto markets, and I dug deeper into the Trump meme coin.

One way to assess whether a meme coin offering is a scam is to look at its “tokenomics” – that is, the predetermined number of units of its supply, how that supply is distributed and how much of it the creator gets to keep. The higher the percentage of the supply allocated to the creators, the more they can sell for profit. As media studies scholar Lana Swartz points out, creator tokens were originally intended for developers to crowdfund their startups. But with meme coins – which typically don’t claim to build anything – they exist to enrich their creators and, potentially, fund continued marketing of the coin.

Unlike Dogecoin, which took a “fair launch” approach – meaning that its creators didn’t allocate a portion of the initial coins to themselves before allowing others to trade it – the majority of Trump tokens are allocated to its creators on a three-year-long distribution schedule.

In fact, 80% of the coin supply will be distributed to the coin’s creators over the course of three years. In other words, the tokenomics of the Trump meme coin are set up so that its creators can slowly sell off their large supply without drastically manipulating its price. Rather than quickly pulling the rug from under investors’ feet, they can do it slowly.

None of this is hidden information – the tokenomics of the Trump meme coin are featured prominently on the coin’s website.

Notably, none of the people behind the coin will begin receiving portions of the supply until March 2025. The amount of profit they can reap will be based on future prices. At the time of this writing, the Trump meme coin was down roughly 60% from its peak.

Who are these creators anyway? The various layers of limited liability companies behind the project, listed in fine print on the $Trump meme website, obscure which individuals stand to benefit.

Presuming Trump