Jonathan Raa/NurPhoto via AP
Donald Trump launched a multi-billion dollar coin just days before taking office and immediately saw his net worth explode. But then, as the initial enthusiasm wore off, the value plunged and occasionally soared again during the first roller-coaster hours of Trump’s second presidency. Despite optimism among some crypto enthusiasts that $TRUMP coin’s debut Friday heralded a new era of automatic crypto wealth, the coin’s value had fallen to about half of its weekend high of 72.62 $ as Trump was sworn in on Monday.
Meme coins have no intrinsic value or particular utility as currency, but rather serve as a cultural signifier. They are usually based on an Internet joke, such as the Internet’s fascination with the doge dog (Dogecoin), or use the image of a celebrity. While real money can be made by riding the speculative ups and downs of coin trading, it is also one of the sectors in the crypto world most prone to bubbles and crashes subsequent ones.
If the new $TRUMP coin is more of a way for crypto enthusiasts to signal their support for Trump – which might be the most coherent explanation for a type of crypto product that makes no sense – the timing for this The new Trump product was auspicious. After announcing the coin’s creation Friday evening at a party for the crypto industry to celebrate Trump’s inauguration, the price rose to $72.62. A total of 1 billion coins were created in an instant, so Trump’s possession of around 800 million new $TRUMP coins meant his wealth exploded almost instantly, from just under 7 billion of dollars to perhaps as much as $65 billion. eve of his presidency.
But then the price started to drop, and minutes before Trump’s official inauguration, the price was down to just under $50. After his inauguration at noon, the price dipped below $40, before rebounding slightly.
In theory, that’s still about $33 billion for Trump, but the volatility is a good indicator of how reliable a source of wealth the coin can actually be. With this product, regardless of the price, Trump’s holdings will have some value because he incurred no expenses to create it – and this value will only be based on consumers’ interest in purchasing something ( digital) bearing his name. .
On Monday, the Trumps announced that first lady Melania Trump had also created her own coin, $MELANIA, which reached a high of $13.05 but by early afternoon on Inauguration Day, it had fallen to $5.27.
Not everyone was enthusiastic about the creation of the memes – ethics expert Norm Eisen told the Washington Post that the play was “the worst conflict of interest in the modern history of the presidency.” Even some members of the crypto community have bristled at the idea, calling it “horrible look” And “predator“, noting that meme coins are generally speculative and essentially worthless.
Trump has promised to remake the American economy in the image of crypto, and his children have started a decentralized finance company– a platform for making financial transactions using crypto instead of a traditional banking institution – from which Trump benefits. However, as the $TRUMP and $MELANIA coin websites make clear, these are not serious investment vehicles.
“Trump memes are intended to function as an expression of support and commitment to the ideals and beliefs embodied in the symbol ‘$TRUMP,'” a disclaimer on the $TRUMP coin. website reads: “and are not intended to be, or to be the subject of, an investment opportunity, investment contract or security of any nature whatsoever. »
Melania’s memes website puts it even more bluntly: “Melania Memes are intended for collection and entertainment purposes only. They are not financial instruments or investments. Always do your own research and never invest more than you can afford to lose.