Connect with us
Active Currencies 17101
Market Cap $3,253,046,718,377.90
Bitcoin Share 58.52%
24h Market Cap Change $-5.24

Vitalik Buterin warns against political memecoins like TRUMP – Here’s why

3min Read

Buterin’s concerns have caused discourse as the TRUMP memecoin sees a significant price drop.

Memecoins

Share this article

 

  • 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.

TRUMP memecoin

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.

Is Buterin motivated by democracy or protecting Ethereum?

While Buterin’s comments are framed as a defense for democracy, some critics suggest his motivations may go beyond that.

One critic argued on X (formerly Twitter)  that a decentralized system should allow politicians the same rights as any other citizen, including creating and trading coins without interference.

Everything is on the blockchain ledger for the public to form their own opinions and vote accordingly. This is much more transparent than things off the blockchain.

Others believe Buterin’s criticism may stem from jealousy over Solana’s success in the memecoin space, speculating that he feels threatened by Solana’s dominance in handling meme coins.

This is not the first time he’s weighed in on mixing politics and cryptocurrency. Months ago, he cautioned against voting for candidates based solely on their pro-crypto stance.

He emphasized that politics is far more complex than the crypto-friendly rhetoric of individual candidates. Such simplifications can overlook the potential risks to democracy.

…freedom is important, decentralized networks are good at protecting freedom, and money is an important sphere where such networks can be applied – but it’s one important sphere among several.

Buterin warned that such oversimplified views could overlook the broader implications of political actions and their long-term effects on governance and democracy.

This broader caution about the use of crypto in politics seems to align with his recent concerns about politician-backed coins.

Share

Samantha is a full-time crypto journalist with 2 years of writing experience in the field. Her key area of interest is the political ramifications of crypto-centric laws around the world. An avid market trader, Samantha also has a keen eye for price anomalies on trading charts.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.