Just days before Donald Trump’s inauguration as 47th president of the United States, the businessman-turned-politican launched his latest venture: a new cryptocurrency token.
Trump announced the launch of Official Trump, also known as $TRUMP, on Friday for nearly $6.50 per token. In the days leading up to the election, the value of token — a so-called meme coin — soared, hitting a high of $73 on Sunday.
Despite plunging in a post-inauguration sell-off, the meme coin was up more than 13% as of Wednesday morning for a value of $42.14, and a market capitalization of $8.42 billion.
First Lady Melania Trump launched her own meme coin, $MELANIA, on Sunday for $7. That token lost nearly 50% of its value since it began trading, priced at just $4 early Wednesday.
The coins deepen the Trump circle’s foray into the crypto industry, which has included World Liberty Financial, a crypto project launched alongside his sons and other business partners last October. That platform has already sold several collections of non-fungible tokens, and more recently made a number of cryptocurrency purchases on Monday.
A meme coin is a cryptocurrency tied to viral internet personalities and jokes, like Dogecoin and Shiba Inu tokens. These digital assets are usually a way to capitalize on trends, and are designed to give people the ability to own pieces of internet culture rather than as a store of value.
According to the Official Trump website, “Trump Memes are intended to function as an expression of support for, and engagement with, the ideals and beliefs embodied by the symbol $TRUMP and the associated artwork, and are not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type.”
$TRUMP tokens have the words “FIGHT FIGHT FIGHT” plastered over a picture of Trump with his fist raised, in reference to the assassination attempt against the president at a campaign rally last July.
Most meme coins are worth just cents or fractions of a cent. And they’re highly volatile: $TRUMP itself plunged more than 50% in value overnight earlier this week, before recovering some ground.
That’s not quite clear.
There are currently 200 million $TRUMP available on the market, according to the Official Trump website. While a total of 1 billion coins will be unlocked over the course of three years, the value of the 800 million remaining locked tokens remains hypothetical given that they’re not yet being traded.
It’s also not known how many of the tokens Trump himself owns. CIC Digital LLC — an affiliate of the Trump Organization — and Fight Fight Fight LLC, a newly-incorporated business co-owned by CIC Digital, are listed as the owners of 80% of available $TRUMP supply. But Trump’s stake in these companies is unknown.
Given the available information, and a price of around $42 per token, the two entities’ $TRUMP holdings could now be worth roughly $6.7 billion.
While the launch of $TRUMP is legal, it raises ethical concerns given the lax regulations of the cryptocurrency industry.
U.S. House Financial Services Committee top Democrat Maxine Waters said in a statement Monday that the $TRUMP meme coin “represents the worst of crypto and shows why many regulators, advocates, and policymakers have long been worried.”
Waters highlighted national security concerns, including the ability of foreign and even sanctioned actors to buy and sell the coin to curry favor with the president.
“Through his meme coin, Trump has created a way to circumvent national security and anti-corruption laws, allowing interested parties to anonymously transfer money to him and his inner circle,” Waters said. “Buyers could include large corporations, allied nations who are pressed to show their ‘respect’ for the President, and our adversaries, like Russia and China, which have much to gain from influencing a Trump presidency.”
Danielle Brian, head of watchdog group Project On Government Oversight, told Reuters that besides being “a blatant financial conflict of interest on behalf of the president,” Trump’s foray into meme coins deepens “his engagement in a world that raises real national security concerns.”
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