President Donald Trump did not get tens of billions of dollars richer amid his inauguration thanks to the cryptocurrency token named in his honor, despite the suggestion from some headlines and the on-paper calculation of how much he stands to gain from the meme coin worth billions.
President Donald Trump and First Lady Melania Trump on Monday.
Trump announced late Friday the launch of the “Official Trump” token, or $TRUMP, on the Solana blockchain network, and $TRUMP quickly went viral and soared in value, rising more than 1,100% from $6 to $75 in 36 hours before tumbling back to below $40 by Tuesday morning, according to CoinMarketCap.
The “Official Trump” website lists two entities as owners of a collective 80% of $TRUMP’s supply: CIC Digital LLC, an affiliate of the billionaire’s Trump Organization, and Fight Fight Fight LLC, a recently incorporated business whose ownership is unclear – without naming the split between CIC Digital and Fight Fight Fight.
Even if Trump did control that full stake, reports attributing as much as a $58 billion windfall for Trump at the coin’s weekend peak were misguided, as they were based on the skewed metric of the coin’s fully diluted valuation, which multiplies $TRUMP’s price by the number of all coins which may eventually become available–but are not currently circulating.
Essentially, that banks on the 200 million existing $TRUMP tokens retaining its same value as CIC Digital and Fight Fight Fight unlock its 800 million $TRUMP coins over the next three years—no sure bet given how financial assets typically lose value as their supply increases (like stocks of public companies going down when a company issues more shares).
The value of the 800 million locked tokens is theoretical considering they are not on the market, and it’s unclear how much Trump owns of that amount jointly controlled by CIC Digital and Fight Fight Fight.
Based on market capitalization, a slightly more sensible metric that multiplies the price of $TRUMP by the number of coins now available, an 80% stake would be worth $6.2 billion—still a dubious estimate given it’s based on supply not yet on the market.
Not counting the meme coin holdings, Trump was worth $6.2 billion Tuesday, according to Forbes calculations. The core of his fortune comes from his social media business and real estate.
Meme tokens often endure highly volatile trading, evidenced by $TRUMP’s near 50% drop from its Saturday peak. Traders have already signaled hesitation at the potential for dilution. The subsequent launch of First Lady Melania Trump’s $MELANIA meme coin was viewed “negatively” by the market due to the “further dilution” of the Trump crypto brand, noted Bernstein analysts led by Gautam Chhugani in a Monday note to clients, And “given how fast [$TRUMP]
Shares of Trump’s publicly traded social media company Trump Media & Technology Group sank Tuesday, falling about 11% by midday, pacing toward its worst daily percentage loss since early November. The value of Trump’s more than 50% equity stake in the company, best known for its Truth Social platform, fell by about $500 million Tuesday. Trump Media, which trades under the ticker $DJT as a nod to the president’s initials, is considered a meme stock by some experts as its multibillion-dollar valuation is a far cry from its light financial performance.
“Whichever way you see it, we think a new chaotic crypto era is here,” wrote Chhugani.