Despite what some stories said and the on-paper estimate of how much President Donald Trump stands to make from the meme coin worth billions, he did not become tens of billions of dollars richer during his inauguration as a result of the cryptocurrency token called in his honor.
When Trump said late Friday that the “Official Trump” token, or $TRUMP, would be launched on the Solana blockchain network, it went viral and saw a sharp increase in value, going from $6 to $75 in 36 hours—more than 1,100%—before plummeting back to less than $40 by Tuesday morning, according to CoinMarketCap.
CIC Digital LLC, an affiliate of the billionaire’s Trump Organization, and Fight Fight Fight LLC, a recently incorporated company whose ownership is unclear, are listed as the owners of 80% of $TRUMP’s supply on the “Official Trump” website. However, the website does not specify the division between CIC Digital and Fight Fight Fight.
The skewed metric of the coin’s fully diluted valuation, which multiplies $TRUMP’s price by the number of all coins that may eventually become available—but are not currently circulating—meant that reports attributing as much as a $58 billion windfall for Trump at the coin’s weekend peak were incorrect, even if Trump did control that entire stake.
It basically bets that the 200 million $TRUMP tokens that are currently in circulation will hold their value the same way that CIC Digital and Fight Fight Fight will unlock their 800 million $TRUMP coins over the course of the next three years. This is not a sure bet because financial assets generally lose value as their supply grows (much like public company stocks decline when a company issues more shares).
Since the 800 million locked tokens are not for sale, their value is purely hypothetical, and it is unknown how much of the total that CIC Digital and Fight Fight Fight jointly possess belongs to Trump.
An 80% ownership would be worth $6.2 billion based on market capitalization, a marginally more reasonable statistic that multiplies the price of $TRUMP by the quantity of coins now in circulation. However, since this estimate is dependent on supply that hasn’t hit the market, it is still questionable.
SO HOW MUCH IS TRUMP WORTH?
Forbes estimates that Trump’s net worth on Tuesday was $6.2 billion, excluding his holdings of joke coins. His real estate and social media businesses account for the majority of his wealth.
WHAT WILL $TRUMP AND $MELANIA BE WORTH?
As demonstrated by $TRUMP’s nearly 50% decline from its Saturday top, meme tokens frequently experience extremely erratic trade. Already, traders have shown hesitancy due to the possibility of dilution. In a Monday letter to clients, Bernstein analysts led by Gautam Chhugani stated that the market saw the subsequent creation of First Lady Melania Trump’s $MELANIA meme coin “negatively” since it “further diluted” the Trump crypto brand. Also, “considering how quickly [$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 $DJT as a nod to the president’s initials, is considered a meme stock by some experts as its multibillion-dollar valuation is a far cry from its light financial performance.
TRUTH SOCIAL STOCK DROPS
achieved a stratospheric market valuation, the 80% insider ownership of the stock does put some pressure on it, Chhugani continued. Unlike stocks, which give investors a stake in a corporation, or bonds, which pay interest, meme coins have no inherent value. The disclaimer on the official Trump coin website reads: “Trump memes are not meant to be, or to be the subject of, an investment opportunity, investment contract, or security of any kind. Instead, they are meant to serve as an expression of support for, and engagement with, the ideals and beliefs embodied by the symbol ‘$TRUMP’ and the associated artwork.”
