President Donald Trump and first lady Melania Trump's new meme coins are drawing skepticism from some prominent investors — even those betting against the market. 

One famed short seller told Yahoo Finance this week that he'll steer clear of meme tokens.

"These things have no intrinsic value. They’re just barometers of how much liquidity is out there, how much speculative frenzy is out there," Carson Block, founder and chief investment officer of Muddy Waters Capital said in an interview with Yahoo Finance last week. "Right now, all the signals are reading there’s a lot." 

He added: "To short something that’s in the midst of a speculative frenzy is a really bad idea. When it’s untethered from reality, it can become further untethered from reality before it becomes tethered to reality. So I wouldn’t touch those."

On Wednesday, the Trump official meme token (TRUMP-OFFICIAL USD) traded just above $27 after hitting a high north of $73 the day before the inauguration. The coin's market cap currently stands above $5 billion. 

The Melania meme coin (MELANIA-OFFICIAL-USD), which launched the day before the president took office, rose to a high of almost $5 before falling to around $2.30 each.

The president has gone all-in with crypto. On Wednesday, Trump Media and Technology Group's (DJT) stock jumped 15% after the parent company of Truth Social announced it will expand into financial services and possibly buy bitcoin and other cryptocurrencies.

Meme tokens are cryptocurrencies inspired by internet memes, artwork, or pop culture. Hundreds of these tokens exist. Popular ones include dogecoin (DOGE-USD) and Shiba Inu (SHIB), both of which include pictures of dogs. 

But prominent investors have been critical of such tokens. Greenlight Capital founder David Einhorn reportedly warned against the meme coin hype in a recent letter, noting that "we have reached the 'Fartcoin' stage of the market cycle." He was referring to a meme coin with the same name.

And in an interview with Yahoo Finance at the World Economic Forum in Davos, Switzerland, Skybridge Capital founder Anthony Scaramucci said that retail investors could be left "holding the bag" on both Trump coins amid volatile swings in value. Scaramucci was a former White House communications director during Trump's first term.

A disclosure at the bottom of both the Trump and Melania coin websites states they "are not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type."

When asked by a reporter about the token on Tuesday, Trump responded, "I don’t know much about it other than I launched it. I heard it was very successful. I haven’t checked it — where is it today?"

ASSOCIATED PRESS

The launch of the meme tokens has faced backlash from crypto advocates who say they are counterproductive to the industry's efforts to be taken seriously.

“The crypto community is a little embarrassed by this,” Ric Edelman, founder of the Digital Assets Council of Financial Professionals, told Yahoo Finance on Wednesday.

“We have to kind of hold our nose to see that this is going to be a side show along the way of crypto legitimization, growth and development, and access to billions of people around the world,” said Edelman.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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