Remember when Donald Trump said crypto was just “based on thin air”? That was back in 2019. Well, things change, don’t they? He’s come a long way since then. Now, he’s really into the whole crypto scene. We’re talking memecoins, DeFi (that’s decentralized finance, like banking without the bank), NFTs (those unique digital pictures), and even stablecoins (crypto meant to stay at a steady price).
- A significant portion of the Trump family’s wealth, approximately 40%, is now reportedly held in crypto assets, marking a substantial shift from his earlier skepticism.
- Trump’s embrace of crypto has influenced political discussions, particularly regarding stablecoins, and has led to scrutiny from Democrats.
- The article highlights the risks associated with memecoins, citing instances of scams and losses for many investors, while also detailing the profits made by insiders.
A group called the State Democracy Defenders Fund put out a report. They figure the Trump family’s net worth grew by a massive $2.9 billion thanks to crypto. And get this, they think 40% of that money is now sitting in crypto assets. That’s quite a shift from “thin air,” isn’t it?
His deep dive into crypto has made waves in politics. A bill about stablecoins, which usually gets support from both sides, hit a wall in a key vote recently. Democrats worried about how much he was making from the industry. It seems his crypto ventures are stirring the pot in Washington.
Trump’s backing seemed to help the crypto market keep going up after his election win last November. Two big things drove that market: memecoins and big companies buying Bitcoin through ETFs (exchange-traded funds, like a basket of investments you can trade easily). The company stuff is mostly for the big players. But memecoins? That’s where everyday folks can get burned. It feels like a place ripe for trouble.
Just the other day, a company called Solidus Labs said something wild. They claimed that 98% of memecoins launched on a platform called pump.fun were basically scams (rug pulls or pump-and-dump schemes). The platform itself pushed back on that claim, of course. Still, it makes you think, doesn’t it?
Another look at the numbers, this time by Chainalysis and reported by CNBC, suggested most people who bought the TRUMP token actually lost money. It’s a tough game, this memecoin business.
So, what’s a memecoin anyway? Think of it like a crypto token that doesn’t really do anything useful. Its value comes from, well, internet jokes or cartoon characters. Dogecoin (DOGE) and Shiba Inu (SHIB) are famous ones. The whole thing went crazy in January when Trump started talking about his own TRUMP token online. Then came MELANIA, named after his wife. Because, why not?
The TRUMP token hit a high of $77.26 on its first day. Now? It’s trading around $10.80. That’s a drop of 86%. Ouch. MELANIA did even worse. It lost over 97% of its value in just four months, trading recently at just 33 cents. It makes you wonder who’s left holding the bag, doesn’t it?
All the buzz from Trump’s social media post kicked off a ton of trading. Data from Chainalysis shows that 760,000 crypto wallets lost money on the TRUMP token. These were mostly regular people, retail investors as they call them.
But a small crew of people didn’t lose money. The Chainalysis data points to 58 wallets that made profits over $10 million. And the folks who created the token? They pulled in a massive $320 million just from trading fees. A small piece of that, about 5%, went to the exchange where it launched, called Meteora.
The MELANIA token? Word is, a group of insiders got their hands on it before it was even advertised online. This is a move sometimes called “sniping.” An investigation by the Financial Times found this insider group made $100 million on MELANIA tokens. They swapped their tokens for USDC (a stablecoin meant to be worth one U.S. dollar) after the price doubled. Pretty neat trick if you can pull it off, and apparently, they did.
One insider who had early access was Hayden Davis from Kelsier Ventures. He talked about being involved in an interview back in February. Davis was also linked to that stablecoin called LIBRA that didn’t go so well and caused some political fuss in Argentina. He seems to pop up in interesting places.
Davis told someone named Coffeezilla in that February interview, “This is going to put me in a lot of danger.” He said he was “a part of it [MELANIA].” He mentioned the team wanted to “snipe it” because the “snipe” on TRUMP was so big. He claimed they weren’t the “big sniper” and didn’t take out any liquidity (money available for trading). It sounds like a complicated world of who knew what when.
Beyond Memecoins
Trump’s jump into crypto isn’t just about the funny money tokens. There’s more to it.
His family is also tied to something called World Liberty Financial. It’s a DeFi platform. They raised around $590 million in two early funding rounds this year. That was when the market was doing really well, near its highest points ever. So, the actual value of that crypto they raised is less now. Data from Arkham Intelligence suggests World Liberty Financial holds about $103 million worth of crypto these days. Still a lot of money, but shows how fast values can change.
He also tried riding the wave of NFTs back in 2022. You know, those digital collectibles. He put out a bunch of cartoons showing him as a superhero or other characters. According to his financial reports, he made about $8 million from selling those NFTs. Not bad for digital pictures.
More recently, there was that crypto dinner. Trump hosted about 25 people who held his TRUMP token. They got a private dinner and a tour of his golf club in Virginia. A report from Bloomberg looked into who these guests were. It turned out 19 of the 25 were either foreign groups or used online exchanges that are actually banned in the U.S. That raised some eyebrows.
He’s planning another dinner for the top 220 holders of his token later this month. Two U.S. Senators, Adam Schiff and Elizabeth Warren, even asked for an investigation. They want the government ethics office to look into whether Trump broke any rules by inviting these top investors to dinner. It seems his crypto connections are now part of the political conversation in a big way.