Trump’s cryptocurrency rises to become one of the world’s most valuable

The Trump family’s new crypto token rose in just two days to become one of the most valuable forms of digital currency in the world, creating the potential for a multibillion-dollar payout to the family but also generating a storm of questions about the conflicts of interest the new business creator.

President-elect Donald J. Trump announced the launch of the new token, $Trump, on Friday night as hundreds gathered for a crypto-inspired inaugural ball not far from the White House.

The bet won praise from some as a sign of how digital currencies are now becoming mainstream in the US.

But economists and even some longtime crypto investors said the new digital coin, known as a memecoin, could also emerge as a watershed moment in the speculative history of crypto trading and the potential dangers it poses to the financial system. Memecoins are a form of cryptocurrency tied to an online joke or celebrity mascot.

“If people want to gamble, I don’t care,” said Lee Reiners, a former Federal Reserve economist who now teaches at a center that studies global financial markets at Duke University. “What I worry about is when this crypto bubble bursts – and it will burst – it will end up affecting people across the economy, even if they don’t have direct investments in crypto. And this new coin makes it worse.”

Eric Trump, one of Mr. Trump’s sons, who helped launch the token, declined to comment Sunday.

At least on paper, the Trump tokens on the market as of Sunday had a combined trading value of nearly $13 billion, and trades totaling $29 billion had taken place in just two days. This calculation is based on the nearly $64 value of each of the 200 million tokens issued, according to to CoinGeckoan industry data tracker.

This suggests that, as of Sunday, Mr. Trump’s coin was the 19th most valuable form of cryptocurrency in the world, CoinGecko figures indicated.

Trump’s affiliates appear to be in control another 800 million tokens which, at least hypothetically, could be worth as much as $51 billion—a total that would make Mr. Trump to one of them richest people in the world.

Before the coin started trading, Forbes had stated Mr. Trump’s net worth at $6.7 billion, most of which comes from the Trump Media and Technology Group, another speculative venture that the Trump family helped start and which runs money-losing social media platform Truth Social.

But Mr. Trump’s newfound crypto wealth would likely evaporate if he moved to sell his coin collection. New cryptocurrencies often shoot up in price, making traders billionaires on paper, only to collapse when coin holders start selling.

This is especially true of memecoins, which are prone to rapid price fluctuations as their internet popularity fluctuates. Prices can also vary across platforms, making it difficult to determine a coin’s actual value. In 2021, one of the first memecoins, a dog-based digital currency called Dogecoin, minted overnight millionaires only to lose much of its value just as quickly.

The launch of the Trump memecoin caught many of the industry’s power brokers off guard.

When the president-elect announced the coin on Friday night, hundreds of the industry’s most influential executives drank cocktails and sang along to Snoop Dogg at an inauguration party in Washington dubbed the Crypto Ball. (One executive who attended the ball said he was “annoyed” that trading in the coin had begun while industry leaders “were not paying attention,” making it difficult for them to profit.)

Nevertheless, some traders have already cashed out.

Within a minute of the coin’s launch, a crypto trader had amassed a $1 million position, according to one analysis of public transaction data from crypto data firm Bubblemaps, which published its findings on social media.

The coin’s price rose and the trader’s account soon sold holdings worth $20 million. The analysis sparked speculation on social media about whether an insider with advance knowledge of the coin’s launch had been able to make quick profits. (Bubblemaps did not immediately respond to a request for comment.)

Conor Grogan, director at Coinbase, one of the largest trading platforms in the United States, estimated in a social media post that as of Saturday, the Trump team had earned $58 million in fees from all sales of $Trump — even without selling its own reserve of tokens to the open marketplace.

It also appears that the Trump team may be transfering some of its tokens on an overseas trading platform called Bybit, which not authorized to conduct trades in the United States, Mr. Grogan remarked. Bybit has recently been the focus of international cryptocurrency enforcement actions regulators.

The launch of the Trump coin immediately created new opportunities for executives, crypto traders and even large corporations to curry favor with the Trump administration.

Anyone can spin up a memecoin for a few dollars, and the vast majority of tokens are not available to buy and sell on mainstream digital currency marketplaces, which often focus on larger, more established coins. But within hours of Mr. Trump’s announcement, became the crypto exchange Kraken began offering the new coin, and Coin basethe largest exchange in the United States, said it would also list it.

Coinbase and Kraken are fighting lawsuits filed by the Securities and Exchange Commission, which conducted a sweeping crackdown on crypto firms during the Biden administration. The companies are among a large group of crypto firms that could benefit from the more relaxed approach to technology regulation that Mr. Trump promised on the campaign trail.

A former crypto-skeptic, Mr. Trump embraced the digital currency industry last year, giving a speech at a major industry conference where he promised to make the United States the “crypto capital of the planet.”

After winning the election, Mr. Trump a number of measures that appear to benefit the crypto industry. He chose someone to lead the SEC who has experience working closely with crypto companies, and tapped venture capitalist David Sacks, a digital currency enthusiast, to oversee crypto and artificial intelligence policy for his administration.

At the crypto ball, Mr. Sacks from the scene that “the reign of terror against crypto is over and the beginning of innovation in America for crypto has just begun,” according to a video posted on social media by Eric Trump.

The president-elect’s family was personally invested in the crypto market even before memecoin was launched. In September, he and his sons co-founded a crypto business, World Liberty Financial, which also has a digital coin associated with it, WLFI.

World Liberty is not directly owned by the Trumps. But Mr. Trump is a promoter of the venture, and he receives a cut of the profits from token sales.

For the most part, the crypto industry has responded enthusiastically to Mr. Trump’s crypto ventures. But some executives expressed concern over the weekend that the memecoin launch would end up hurting amateur traders.

A popular crypto podcaster called it’s a “free money grab” that would be “bad for humanity.” Erik Voorhees, a prominent Bitcoin investor, wrote on social media that the memecoin was “stupid and embarrassing.”

Still, the Trump family’s embrace of cryptocurrencies shows no signs of slowing down.

“It’s time to celebrate everything we stand for: WINNING!” Mr. Trump wrote on Friday when he announced the birth of the new crypto token. “Join my very special Trump community. GET YOUR $TRUMP NOW.”