- Buterin warned that politician-backed cryptocurrencies could enable covert financial influence, posing risks to democracy
- The TRUMP memecoin’s 14% price drop sparked a debate on the meeting of politics, crypto, and market manipulation
The TRUMP memecoin saw a sharp 14% price drop within 24 hours following critical remarks from Vitalik Buterin.
Ethereum’s [ETH] co-founder warned that politician-backed cryptocurrencies could be used for covert bribery.
They could enable politicians to passively grow their wealth and influence. His comments reignite past warnings about the dangers of voting for candidates solely based on their pro-crypto stance.
This has sparked debate among crypto users and investors alike.
Buterin’s warning: Risks of politician-backed coins
Vitalik Buterin’s recent comments on the TRUMP memecoin launch have sparked controversy, particularly as the coin’s price plummeted 14% within 24 hours, at press time.
Source: Coinmarketcap
Buterin warned against the creation of politician-backed cryptocurrencies. He argued that investors could increase a politician’s wealth by simply holding their coin, without direct transactions.
His criticism goes deeper, highlighting the risks such coins pose to democracy. They combine elements of gambling and donation with plausible deniability.
The economic arguments for why markets are so great for “regular” goods and services do not extend to “markets for political influence.” I recommend politicians do not go down this path.
TRUMP memecoin: The fallout
The TRUMP memecoin’s price drop within 24 hours reflects investor unease.
The coin initially gained traction due to its association with President Trump, riding on political and meme-driven hype.
However, Buterin’s warning about the risks of politician-backed cryptocurrencies may have contributed to shifting sentiment. This led to a drop in confidence among investors.
The market’s immediate reaction highlights concerns over political influence and potential regulatory scrutiny. These factors weigh heavily on the coin’s short-term prospects.
