Trump coin and other meme tokens are to blame for the crypto winter, famed investor Ross Gerber says
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- Bitcoin and the wider crypto market are in a rut.
- Fund manager Ross Gerber blames meme coins, including Trump's, for eroding trust in crypto.
- He said celebrity-backed meme coins are driving investors away from the market.
One year into Donald Trump's presidency, bitcoin is worth less than it was before he was elected, and the entire market is in the throes of a crypto winter. According to famed investor Ross Gerber, blame the meme coin ecosystem for the broader decline.
The CEO of Gerber Kawasaki Wealth & Investment Management thinks the launch of the Trump and Melania coins around the time of the inauguration, followed by a subsequent boom in meme tokens, has left investors fatigued and wary of digital assets.
In his view, meme coins either endorsed or launched by celebrities are either rug pulls or end up looking like one. In either case, normal investors are left holding the bag while celebrity boosters get rich.
He pointed to World Liberty Financial Coin and the Melania token, which have both plummeted in price, while the Trump meme coin has also shed about 80% of its value in the last year.
"People dive in and buy this stuff because they buy into the fraud, basically, and then they get burned, and that money doesn't come back. It's stolen from them."
This is only part of the problem that Gerber sees. When people lose money betting on meme coins, he added, they typically turn their back on crypto and don't come back. He also thinks the Trump administration's looser approach to crypto regulation is making the market less appealing to everyday investors.
He said it is extremely difficult for bitcoin to rally when investors are being scared away from crypto, as demand rises only when new participants enter the market.
Gerber also cited other celebrity-launched cryptos, such as the token launched by former NYC mayor Eric Adams and the $HAWK coin launched by internet personality Haliey Welch, as examples of celebrities meme coins that plummeted shortly after they debuted, while leaving investors holding the bag.
Gerber isn't the only one arguing that a growing lack of faith in crypto is compromising bitcoin and the broader crypto market. Economist Mohamed El-Erian, chief economic advisor at Allianz, recently argued that it will be hard for bitcoin to rise again until institutional investors increase their participation.