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President Donald Trump’s meme coin could be a classic cash grab — much like his Bibles made in China for $60 and his $400 Gold Sneakers – but it’s not the kind of business that can catapult one’s wealth into the stratosphere.
A few media reported a total meltdown in Trump’s net worth over the weekend, and those numbers spread across social media. With respect, however, you must squint Really hard and swallow a giant red crypto pill only to conclude that the president’s net worth suddenly soared 800% thanks to a digital asset that is functionally useless (more on that in a moment).
He’s still a billionaire, of course, but in the single digits — hundreds of billions of dollars shy of the level of the wannabe tech oligarchs who surrounded him at his inauguration on Monday.
Here is the offer: Calculating the wealth of rich people is not as simple as it might be for you and me. Norms like us have a salary and maybe a few assets like a house and a retirement account, if you’re very lucky. Total those things up, minus any debt, and there you have it.
But the very rich often have a range of assets, such as stock options and stakes in private companies whose values are a little more obscure. In the financial media, Forbes And Bloomberg have entire teams dedicated to reporting on the daily fluctuations of the world’s richest people.
Both estimate that Trump’s fortune, which is largely tied to real estate and his majority stake in his social media company, Truth Social, is valued at just over $6 billion.
Then Trump and his wife launched their $TRUMP and $MELANIA coins – essentially digital tokens which are, officially, the cryptocurrencies approved by the president and first lady. But in reality, they trade purely based on emotions and don’t even have any theoretical use inside or outside of the crypto space. (In the frenzy over these launches, someone created an unofficial “Barron” coin that turned out to be unrelated to the president and the first lady’s son, Barron Trump. This coin, according to Crypto.comlooks like the kind of textbook rug draw that made coins virtually synonymous with scams.)
Neither Forbes nor Bloomberg take Trump’s crypto holdings into account in their calculations, because, as Bloomberg Notes“their speculative nature, volatility and lock-ins make it difficult to determine their value.”
The official $TRUMP coin website states that 80% of the token supply is controlled by two subsidiaries of the Trump Organization, the president’s private conglomerate. The “fully diluted value” of the coin, which reflects the total value, assuming all of its tokens are available — stood at about $72 billion near its peak on Sunday, which, by the power of wishful thinking, would put the Trump Org’s 80% stake at nearly $58 billion. dollars.
Using a fully diluted value is particularly questionable in the crypto world, because it assumes that the price of a given asset will remain stable, which…it certainly won’t. (Technology researcher and journalist Molly White wrote a lot about this.)
In keeping with meme coin volatility, $TRUMP jumped more than 1.00% over the weekend, then lost half its value on Monday – the kind of loss that makes meme coin slots the craziest aspects of the largely unregulated crypto casino.
Even bitcoin, the most popular and “safe” token, is too prone to wild swings for many traditional investors.
Conclusion: Certainly, Trump will make money of this stuff, because, well, he loves merch. Put Trump’s name on a Bible, sneakers, watches or cologne and let the profits flow. (The Trump coin arguably has less direct utility than any of these products, but it serves as an obvious, unregulated, and ultimately anonymous way to show dedication to the brand.)
“He realizes that the power and theme of the presidency allows him to make a lot of money selling Trump coins – it’s very much in keeping with his character, and he doesn’t worry about potential conflicts of interest” , James Angel, a professor at the Psaros Center for Financial Markets and Policy at Georgetown McDonough, told me. “It’s just a quick way for him to make money.”
According to some estimates, the Trump Org is raking in tens of millions in trading costs.
But that doesn’t make the president a “crypto-billionaire” – a term that, whatever the context, should be taken with extreme caution.