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The Trump family’s new crypto brand has surged in just two days to become one of the most valuable forms of digital currency in the world, raising the possibility of a payoff millions of dollars for the family but also creates a storm of questions about conflicts of interest. create the new company.
President-elect Donald J. Trump announced the launch of the new token, $Trump, on Friday night as hundreds gathered for a crypto-inspired inaugural ball not far from the White House.
The company has been hailed by some as a symbol of where digital currency is going today in the United States.
But economists and even long-time crypto investors say that the new digital coin, known as memecoin, could turn out to be a turning point in the history of crypto trading and risk. may occur in the financial system. Memecoins are a type of cryptocurrency tied to a popular online joke or mascot.
“If people want to gamble, I don’t care,” said Lee Reiners, a former Federal Reserve economist who is a professor at the Center for the Study of Global Economic Markets at Duke University. “What’s important to me is that when this crypto bubble bursts — and it will — it will affect people across the economy even if they don’t have direct investments in crypto. And this new coin makes it even worse.”
Eric Trump, one of Mr. Trump’s sons, who helped put out the sign, declined to comment Sunday.
At least on paper, the Trump brand in the market on Sunday had a sales value of almost $ 13 billion, and the total sales of $ 29 billion were made in just two days. That calculation is based on a value of $64 per 200 million tokens issued, according to CoinGecko, an industry data tracker.
This indicates, as of Sunday, that the coins of Mr. Trump is the 19th most valuable cryptocurrency in the world, according to CoinGecko’s tally.
Trump associates appear to control another 800 million brands that, at least hypothetically, could be worth $51 billion – a combination that would make Mr. Trump one of the world’s richest people.
Before the sale began, Forbes listed the net worth of Mr. Trump to $6.7 billion, most of which comes from the Trump Media and Technology Group, another speculative venture the Trump family helped start, which runs the money-losing social media platform Truth Social.
But Mr. Trump’s new crypto fortune could be wiped out if his currency sells off. New cryptocurrencies often skyrocket in value, making traders paper billionaires, and collapse when coin holders start selling.
This is especially true of memecoins, which can fluctuate in value quickly as internet popularity fluctuates. Prices can fluctuate across the board, making it difficult to determine the value of a coin. In 2021, one of the first memecoins, a dog-based digital currency called Dogecoin, created millions overnight, quickly losing its value.
The launch of the Trump memecoin has attracted many of the power brokers in the industry.
When the president-elect announced the coin on Friday night, hundreds of top industry executives sipped cocktails and sang along to Snoop Dogg at an unveiling event in Washington dubbed the Crypto Ball. (One executive who attended the ball said he was “upset” that the coin began trading while industry leaders were “ignoring” it, making it difficult for them to make a profit.)
However, some sellers have already paid.
Within a minute of the coin’s launch, crypto traders amassed $1 million worth of positions, according to an analysis of public exchange data by crypto data firm Bubblemaps, which published the results on social media.
The price of the coin soared, and soon the trader’s account sold $20 million worth of assets. The analysis sparked speculation on social media that someone with advance knowledge of the coin’s launch could make a quick profit. (Bubblemaps did not immediately respond to a request for comment.)
Conor Grogan, the director of Coinbase, one of the largest trading platforms in the United States, estimated in a social media post that on Saturday, the Trump team received a fee of 58 million dollars from all $ Trump sales – even if they didn’t sell. its own stock for the open market.
It also appears that the Trump team may transfer some of its tokens to an overseas trading platform called Bybit, which is not allowed to trade in the United States, Mr. Grogan noted. Bybit has recently been the focus of enforcement action by international cryptocurrency regulators.
The launch of the Trump coin immediately created new opportunities for executives, crypto traders and even large corporations to curry favor with the Trump administration.
Anyone can mine memecoin for a few dollars, and most tokens cannot be traded and traded in the traditional digital currency market, which tends to focus on larger and more stable coins. But within hours of Mr. Trump, crypto exchange Kraken has started offering the new coin, and Coinbase, the largest exchange in the United States, has said it will list it as well.
Coinbase and Kraken are fighting a lawsuit filed by the Securities and Exchange Commission, which has cracked down heavily on crypto companies during the Biden administration. These companies are part of a large group of crypto companies that are benefiting from a more relaxed approach to technical regulations that Mr. Trump promised during the campaign.
A one-time crypto skeptic, Mr. Trump took on the digital currency industry last year, giving a speech at a major industry conference where he promised to transform the United States into the “capital of the planet.”
After winning the election, he made a series of announcements that seemed poised to benefit the crypto industry. He chose someone to lead the SEC who has experience working closely with crypto companies, and tapped venture capitalist David Sacks, a digital currency enthusiast, to oversee crypto and artificial intelligence policy for its management.
At the Crypto Ball, Mr. Sacks announced from the stage that “the reign of terror against crypto is over, and the beginning of reform in America for crypto has just begun,” according to a video posted by Eric Trump on social media.
The president-elect’s family was personally involved in the crypto market even before the launch of memecoin. In September, he and his son helped found a crypto company, World Liberty Financial, which has a related digital coin, WLFI.
Liberty World is not directly owned by Trump. But Mr. Trump is a promoter of the company, and he gets a cut of the profits from brand sales.
In general, the crypto industry responded positively to the crypto business of Mr. Trump. But some executives expressed concern this weekend that the launch of memecoin will end up hurting retail sentiment.
A popular crypto podcaster called it a “free money grab” that could be “bad for humanity.” Erik Voorhees, a famous Bitcoin investor, wrote on social media that memecoin is “stupid and embarrassing”.
However, the Trump family’s embrace of cryptocurrencies shows no sign of abating.
“It’s time to celebrate everything we stand for: VICTORY!” Mr. Trump on Friday as he announced the birth of a new crypto token. “Fighting my own Trump community. GET YOUR $TRUMP NOW.”
