Behind Trump's issuance of memecoin: conflicts of interest and regulatory challenges

In the past two days, Trump's popularity has continued to ferment in various media. Many people even shouted that the crypto ecosystem now only has Bitcoin and Trump.

The reason for this statement is that, on the one hand, the base of participants affected by Trump is too large.

Previously, Trump had issued his own NFTs on Polygon and Bitcoin, but those NFTs did not have such a big impact as Trump. The main reasons may be:

- The audience of NFT is very limited, far less than that of meme coins, which theoretically allow all users with crypto wallets to participate;

- The liquidity of NFT is not as good as that of meme coins, which allows participants to immediately cash in their gains or losses and have an immediate impact on the market.

On the other hand, the fact that the president issued coins broke people's cognition. Everyone is worried that the trend of the crypto ecosystem in the next four years will be highly tied to him alone.

Why is he so closely tied to the government?

In the past US government, although officials were appointed by the president, they often had greater discretion. Judging from Trump's past style of doing things, the officials he appointed probably have very limited discretion, and they can be replaced at any time as long as they don't suit his wishes--even the Secretary of State is not immune.

Therefore, the US crypto policy for the next four years can be said to be basically his policy.

And the person who really makes the policy is extremely uncertain in his actions.

Finally, this person who affects the crypto ecology is now involved in too deep and too large a stake in the ecology, and will affect all aspects of the entire crypto ecology for quite a long time.

I have always believed that the biggest driving factor of meme coins is emotions, and the duration of emotions is very limited.

Starting with Dogecoin, among all the meme coins so far, only Dogecoin has been popular until today. All other meme coins (including SHIB, which created the myth back then) have gradually faded out of the public's view as the public sentiment faded.

The reason why the popularity of Dogecoin can continue to this day is because Musk has continued to "bless" it.

And the reason why Musk's blessing can continue to work is essentially because he has continuously made amazing progress and impressive performance in several disruptive technology industries at the same time, and from time to time he hinted that the business dividends of these industries will be linked to Dogecoin.

Now the story of Musk blessing Dogecoin will be repeated in Trump blessing Trump.

But there is still a big difference between the two supports:

Musk’s support at most allows people to see the possible prospects and potential narratives of Dogecoin-------he only affects Dogecoin, and at most Bitcoin, but has almost no impact on other areas of the crypto ecosystem.

But Trump's support will not only affect Trump's possible prospects and potential narratives---he will affect the development of all areas of the entire crypto ecosystem, because his personal views, his position, and the power in his hands will affect the direction of US crypto policy, such as:

- Bitcoin is included in the US national reserves

- Compliance operations of crypto assets

- Issuance rules of crypto assets

- Tax issues of crypto assets

- Mortgage issues of POS

......

We can list a long list just by thinking about it.

What’s more complicated is that he has issued his own meme coin, which will inevitably have a large conflict of interest with the crypto ecosystem in many aspects:

A typical phenomenon is the seesaw effect between Trump and other crypto assets during this period: Trump rises, other coins fall; Trump falls, other coins resume rising. Every such fluctuation affects almost all participants in the crypto ecosystem.

In the future, when his crypto policy and Trump token inevitably conflict with each other, how will he deal with it?

If Trump coin has brought widely circulated wealth effects and stories of getting rich quickly to participants in the crypto ecosystem before, I think what is more worrying is what kind of negative impact and emotional fluctuations Trump coin will bring to the crypto ecosystem.

I am particularly worried that when the interests of Trump's tokens conflict with the overall interests of the crypto ecosystem, he will make obviously biased decisions, and such decisions will affect the entire crypto ecosystem and the supervision and attitude of other countries in the world towards the crypto ecosystem in the future.