With the upcoming 2024 elections, things are only just warming up politically, and it seemingly looks like Donald Trump will not stop at anything to make sure he is at the top of the ticket. What is the latest move by him? Jumping headlong into cryptocurrency with the announcement of World Liberty Financial.
But is this an honest affront to change the world of finance or just another publicity stunt?
With the looming election, one can't help but think that this is some attempt at trying to woo the crypto crowd. Trump's always been a master at manipulating media, and this feels like another play straight out of his playbook. But the crypto community isn't easily fooled. We've seen our fair share of pump-and-dump schemes and empty promises.
The new platform, launching on September 16th over Twitter(X) Spaces, because of course it would be on Twitter, it promises a suite of services including a digital wallet, the ability to lend and borrow, and asset storage. On paper, that all sounds brilliant, but it makes me skeptical. Trump's track record with business ventures is at best mixed. Trump Steaks? Trump University? The list goes on.
This does lend a degree of credibility to the project, raising some questions at the same time:
Is Aave risking its reputation by associating itself with such a polarizing figure?
And how much actual control will Trump have over the operations of the platform?
Then, there is this whole introduction of a governance token, WLFI, which, if common for a DeFi project, is also potentially a minefield when it comes to regulatory issues. Considering how complicated Trump's relations were with financial regulations, I wonder how it will go. Will the SEC breathe down their neck from day one?
Speaking of which, of course, Trump's past stance on cryptocurrency. It wasn't that long ago that he was poo-pooing Bitcoin and other cryptocurrencies, characterizing them all as "based on thin air" and "unregulated crypto assets." This 180-degree turn feels opportunistic at best and disingenuous at worst. It's hard not to look at this as a desperate attempt to tap into a voter base he alienated.
At one point, 84% of bettors were sure of it. In fact, in recent times, that fell in as low as 69%, although that is still a pretty overwhelming majority. Then again, let's be serious because people putting money on something doesn't make it even an advisable idea.
If he ever launches a token, I have serious concerns about its long-term viability and how it may be manipulated. Given his history of making very big promises and leaving others to clean up the resulting mess, I am concerned for those investors who may get caught up in the hype.
We also have to recall the Trump-related meme coin flood that we saw at the beginning of this year. Many of those were pump-and-dump schemes that left investors with worthless tokens. If the Trump team is not even more cautious, it might turn out to create such a situation with their token.
This speaks, on a macro level, to the modern interplay between politics and cryptocurrency. It's a growing trend that we continue to see, as different politicians try to stake a claim to crypto-friendliness. There's a difference between being genuinely interested in the technology and its potential and using it simply as a political tool.
Now while I am very excited about the mainstream adoption of cryptocurrency, I simply can't help but approach Trump's World Liberty Financial with a healthy dose of skepticism. It is so important that, as a community, we are vigilant and we are critical-most of all when big names and politics get in the way.
