- Buterin warned that politician-backed cryptocurrencies could enable covert financial influence, posing risks to democracy
- The 14% price drop of the TRUMP memecoin sparked a debate about the meeting of politics, crypto and market manipulation
The TRUMP memecoin saw a sharp 14% price drop within 24 hours after critical comments from Vitalik Buterin.
Ethereums [ETH] co-founder warned that cryptocurrencies backed by politicians could be used for secret bribery.
They could allow politicians to passively grow their wealth and influence. His comments reignite previous warnings about the dangers of voting for candidates based solely on their pro-crypto stance.
This has sparked debate among crypto users and investors.
Vitalik Buterin’s recent comments on the launch of the TRUMP memecoin have sparked controversy, especially since the price of the coin fell 14% in 24 hours, at the time of writing.
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Source: Coinmarketcap
Buterin warned against the creation of cryptocurrencies backed by politicians. He argued that investors could increase a politician’s wealth by simply holding their currency, without direct transactions.
His criticism goes deeper and emphasizes the risks that such coins entail for democracy. They combine elements of gambling and donation with plausible deniability.
The economic arguments for why markets are great for “mainstream” goods and services do not extend to “markets for political influence.” I advise politicians not to take this path.
TRUMP memecoin: the consequences
The TRUMP memecoin’s price drop within 24 hours reflects investor unease.
The coin initially gained traction due to its association with President Trump, which stemmed from political and meme-driven hype.
However, Buterin’s warning about the risks of politician-backed cryptocurrencies may have contributed to the changing sentiment. This led to a decline in confidence among investors.
The market’s immediate reaction underlines concerns about political influence and possible regulatory scrutiny. These factors weigh heavily on the currency’s short-term prospects.