Bitcoin memes and Ponzi schemes | Editorial

Much has been made of Donald Trump’s apparent about-face on cryptocurrency. This is particularly notable since the president’s dealings in the virtual cash he once spurned have earned him at least $1.4 billion since he returned to office. Not bad for something he had called “a scam” and an asset “based on thin air.”

Of course, that assumes he meant those things as derogatory.

After a lifetime of pushing real estate, casinos, liquor, and steaks, one may think the Art of the Steal has finally gone high-tech. But at least for retail investors, Trump’s crypto ventures reek of old-fashioned Ponzi schemes.

Launched a few days before his inauguration in 2024, the $TRUMP memecoin — a digital token with no intrinsic value — reached a peak price of around $74 as the president hyped up the asset to his followers. The coin’s value cratered soon after and was trading under $3 in September.

A few dozen early investors made multimillion-dollar profits, but most buyers fared poorly, losing almost $4 billion as of earlier this year, according to a New York Times analysis.

Even if Trump supporters and less savvy investors played along willingly, the game was always rigged in the president’s favor — regardless of the memecoin’s price, Trump and his business partners were always going to rake in transaction fees.