Trump’s cryptocurrency is rising to become one of the most valuable currencies in the world

Trump family New encryption code It has soared in just two days to become one of the world’s most valuable forms of digital currency, creating the potential for a multibillion-dollar payout for the family but also generating a storm of questions about the conflicts of interest the new venture creates.

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

Project It was praised by some As evidence of how digital currencies are now spreading in the United States.

But economists and even some longtime cryptocurrency investors said the new digital currency, known as memecoin, may also emerge as a landmark moment in the history of speculation in cryptocurrency trading and the potential risks it poses to the financial system. Memecoins are a type of cryptocurrency associated with an online joke or a celebrity’s mascot.

“If people want to gamble, I don’t really care,” said Lee Reiner, a former Fed economist who now teaches at the Center for Global Economic Markets at Duke University. “What concerns me is that when this cryptocurrency bubble bursts — and it will burst — it will end up affecting people throughout the economy even if they don’t have a direct investment in crypto. And this new currency makes that worse.”

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

On paper at least, the total trading value of Trump tokens in the market as of late Sunday afternoon was nearly $13 billion, and a total of $29 billion worth of trades were executed in just two days. This calculation is based on the value of approximately $64 for each of the 200 million tokens issued, according to the Verge website. To Quinn Gekkoan industry data tracker.

This means that, as of Sunday, Mr. Trump’s coin was the 19th most valuable cryptocurrency in the world, a CoinGecko tally indicated.

Trump’s companies appear to be in control 800 million other tokens Which, at least in theory, could be worth as much as $51 billion — a total that would make Mr. Trump one of The richest people in the world.

Before the currency begins to circulate, Forbes had Mr. Trump’s net worth is listed at $6.7 billion, most of which comes from Trump Media and Technology Group, another speculative venture the Trump family helped launch, which runs Trump Media and Technology Group. Losing money Truth Social social media platform.

The Trump family moved late Sunday to add a second new encryption token, called this token $MelaniaWith Mr. Trump and his wife Melania, They both promote it on Truth SocialJust as Mr. Trump was about to begin a rally in Washington to celebrate his inauguration.

“The official Melania meme is alive!” He said the social media post.

The move then coincided with a decline in the value of Mr Trump’s token, falling to as low as $41, before starting to rise again, as doubts emerged about how valuable these new tokens actually were. Mr. Trump does not appear to hesitate.

“Bitcoin has broken record after record,” Mr. Trump said at his rally, referring to another form of cryptocurrency. He added during his statements, “These are all investments made only because we won the elections.”

But Mr. Trump’s newfound wealth is likely to evaporate if he moves to sell his coin collection. New cryptocurrencies often soar in price, making traders billionaires on paper, and then crash when coin holders start selling.

This is especially true for meme currencies, which are vulnerable to rapid price fluctuations as their popularity on the Internet fluctuates. Prices can also vary across platforms, making it difficult to determine the actual value of the coin. In 2021, one of the first meme currencies, a dog-based cryptocurrency called Dogecoin, appeared. Mint millionaires overnightonly to lose a lot of its value just as quickly.

The launch of Trump’s memecoin caught many power brokers in the industry by surprise.

When the president-elect announced the coin on Friday night, hundreds of the industry’s most influential executives were sipping cocktails and singing along to Snoop Dogg at an inauguration in Washington dubbed the “Crypto Ball.” (One executive who attended the event said he was “bothered” that currency trading had begun while industry leaders “weren’t paying attention,” which made it difficult for them to profit.)

However, some traders have already benefited.

Within a minute of the coin’s launch, one cryptocurrency trader amassed a $1 million position, according to a report. analysis From public transaction data by cryptocurrency data company Bubblemaps, which posted its findings on social media.

The price of the coin soared, and the trader’s account soon sold holdings worth $20 million. The analysis sparked speculation on social media about whether an insider with prior knowledge of the coin’s launch was able to make a quick profit. (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, he said that as of Saturday, Trump’s team had generated $58 million in fees from all of Trump’s dollar sales — even without selling its own reserve of tokens to the open market.

It also looks like Team Trump might be tooTransferring some of its symbols On an external trading platform called Bybit, any Not permitted to execute transactions in the United States, Mr. Grogan noted. Bybit has recently become the focus of enforcement actions by international cryptocurrencies Organizers.

The launch of Trump Coin immediately created new opportunities for CEOs, cryptocurrency traders, and even major corporations to curry favor with the Trump administration.

anyone Can memecoin spin For just a few dollars, the vast majority of tokens are not available for purchase and sale on mainstream cryptocurrency markets, which often focus on larger, more established coins. But within hours of Mr. Trump’s announcement, the cryptocurrency exchange was launched Kraken The new currency was introduced, and CoinbaseThe largest exchange in the United States said it would also list it.

Coinbase and Kraken are facing lawsuits brought by the Securities and Exchange Commission, which has launched a broad crackdown on cryptocurrency companies during the Biden administration. These companies are among a large group of cryptocurrency companies that will benefit from the more relaxed approach to technology regulation that Mr. Trump promised during his election campaign.

A crypto skeptic, Trump embraced the cryptocurrency industry last year, delivering a speech at a major industry conference in which he promised to turn the United States into the “cryptocurrency capital of the planet.”

After his election victory, Mr. Trump made a series of moves that appear poised to benefit the cryptocurrency industry. he He chose someone to lead the Securities and Exchange Commission He has a track record of working closely with cryptocurrency companies, and has brought in venture capitalist David Sachs, a digital currency enthusiast, to oversee cryptocurrency and artificial intelligence policy for his department.

At the Crypto Ball, Mr. Sachs announced from the stage that “the reign of terror against cryptocurrencies is over, and the beginning of crypto innovation in America is just beginning,” according to a video. Posted by Eric Trump on social media.

The president-elect’s family has personally invested in the cryptocurrency market even before the launch of the memecoin. In September, he and his sons helped It starts It is a cryptocurrency company, World Liberty Financial, which also has an associated digital currency, WLFI.

World Liberty is not directly owned by the Trump family. But Mr. Trump is a promoter of the project, and receives a portion of the profits from token sales.

For the most part, the cryptocurrency industry has responded enthusiastically to Mr. Trump’s cryptocurrency projects. but some Executives expressed concern this weekend that the memecoin launch could end up hurting amateur traders.

One of the famous cryptocurrency broadcasters Named It is an “unjustified cash grab” that would be “bad for humanity.” Eric Voorhees, a prominent Bitcoin investor, he wrote on social media That the memecoin was “stupid and embarrassing.”

The Trump family’s embrace of cryptocurrencies still shows no sign of slowing down.

“It’s time to celebrate everything we stand for: winning!” Mr. Trump He wrote on Friday When he announced the birth of a new crypto token. “Join the very special Trump community. Get your Trump now.