Top line
President Donald Trump did not get tens of billions of dollars richer during his inauguration from the cryptocurrency token named in his honor, despite some headlines suggesting and calculating on paper how much he could make from it the coin worth billions. .
President Donald Trump and first lady Melania Trump on Monday.
Key facts
Trump announced the launch of the “Official Trump” token, or $TRUMP, on the Solana blockchain network on Friday evening, and $TRUMP quickly went viral and soared in value, increasing over 1,100% from $6 to $75 in 36 hours before falling again. at less than $40 by Tuesday morning, according to at CoinMarketCap.
The “Official Trump” website lists two entities as owners of a total of 80% of the $TRUMP supply: CIC Digital LLC, a subsidiary of the billionaire’s Trump Organization, and Fight Fight Fight LLC, a recently incorporated company whose ownership is unclear – without naming it. the split between CIC Digital and Fight Fight Fight.
Even if Trump controlled this entire stake, reports attributing up to $58 billion to Trump at the coin’s weekend peak was a mistake, as they were based on the coin’s asymmetric measure of fully diluted valuation, which multiplies the price of $TRUMP by the number of all coins that could eventually become available – but are not currently circulating.
Essentially, banking on the existing 200 million $TRUMP tokens remaining the same value as CIC Digital and Fight Fight will unlock its $800 million TRUMP tokens over the next three years – not a sure bet given how whose financial assets generally lose value as their supply increases. (like public company stocks falling when a company issues more stock).
The value of the 800 million locked tokens is theoretical given that they are not on the market, and it is unclear how much Trump owns of that amount jointly controlled by CIC Digital and Fight Fight Fight.
Based on market cap, a slightly more reasonable measure that multiplies the price of $TRUMP by the number of coins currently available, an 80% stake would be worth $6.2 billion – still a dubious estimate given that it is based on an offer not yet on the market.
So how much is Trump worth?
Not including coin holdings, Trump was worth $6.2 billion as of Tuesday, according to according to Forbes calculations. Most of his fortune comes from his social media business and real estate.
What will $Trump and $melania be worth?
Meme tokens often experience very volatile trading, as evidenced by $TRUMP’s nearly 50% drop from its Saturday high. Traders have already expressed hesitation about the potential for dilution. The subsequent launch of First Lady Melania Trump’s $MELANIA meme coin was perceived “negatively” by the market due to the “further dilution” of the Trump crypto brand, noted Bernstein analysts led by Gautam Chhugani in a Monday’s note to customers, and “given how quickly ($TRUMP)
has reached a stratospheric market value, the 80% bid held by insiders is creating some pressure on its market value,” Chhugani added. Meme coins do not hold underlying value like stocks that grant investors a share of a company or bonds that offer interest payments. The official Trump Coins website has the following disclaimer: “Trump memes are intended to function as an expression of support and commitment to the ideals and beliefs embodied in the symbol “$TRUMP” and associated artwork, and are not intended to be, or the subject of, an investment opportunity, investment contract or security of any kind.
Decline in social truth actions
Shares of Trump Media & Technology Group, Trump’s publicly traded social media company, fell Tuesday, falling about 11% by midday, heading for its worst daily percentage loss since early November. The value of Trump’s more than 50% stake in the company, best known for its Truth Social platform, fell by about $500 million on Tuesday. Trump Media, which trades under the symbol $DJT in a nod to the president’s initials, is considered a meme stock by some experts because its multi-billion dollar valuation is a far cry from its meager financial performance.
Crucial quote
“Whichever way you look at it, we believe a chaotic new era of crypto has arrived,” Chhugani wrote.