Donald Trump is the newest crypto billionaire
The $TRUMP memecoin β a financial asset that didn't exist on Friday afternoon β now accounts for about 89% of Donald Trump's net worth.
Why it matters: The coin (technically a token that's issued on the Solana blockchain) has massively enriched Trump personally, enabled a mechanism for the crypto industry to funnel cash to him, and created a volatile financial asset that allows anyone in the world to financially speculate on Trump's political fortunes.
- After another massive overnight rally, as of Sunday morning Trump's crypto holdings were worth as much as $58 billion on paper, enough -- with his other assets -- to make him one of the world's 25 richest people.
Where it stands: While the Biden administration broadly took the view that memecoins like $TRUMP are securities subject to SEC regulation, the incoming Trump administration has pledged to be much more crypto-friendly and to regulate such coins with a light or nonexistent touch.
For the record: The coin's official website, GetTrumpMemes.com, urges visitors to buy coins with either dollars or crypto in order to "Celebrate Our Win & Have Fun!"
- The coin is "not intended to be... an investment opportunity," per the site, which says that it "has nothing to do with any political campaign or any political office."
- That hasn't stopped investors from making millions by speculating on the price of the coin, which was launched while Trump was reportedly hosting a "Crypto Ball" in Washington.
By the numbers: Some 200 million of the 1 billion total coins have already been released and are being actively traded. The rest, which are owned by Trump-controlled entities, will be able to be sold at various points over the next three years, starting in April.
- On average, Trump's companies will be able to sell some 24 million coins per month into the market, which at current prices (which keep moving), would amount to an income of $1.73 billion per month, or $20.7 billion per year. (Although no one has a clue what the value of the coin will even be this afternoon, let alone three years from now.)
- Not to be outdone, Melania Trump launched her own coin MELANIA Sunday night, almost immediately achieving a market capitalization north of $5 billion.
Flashback: During the first Trump administration, there were worries that individuals were able to enrich the president by staying at his hotel in Washington.
- Since then, Trump has listed a meme stock where he controls more than 50% of the shares β and, now, has a meme coin that's even less tethered to reality.
- Both of them represent a much more direct way of funneling money to Trump than staying at his hotel did.
Between the lines: The emoluments clause of the Constitution, written in 1787, hardly envisaged a world where a president could conjure billions of dollars of wealth out of nowhere just by endorsing a meme.
- In the present day, it's impossible to track who's going to be buying this coin over the next three years and thereby directing their money directly at Trump.
- Given the Supreme Court's expansive view of presidential immunity, there's a good chance that any such action will be deemed lawful.
The bottom line: Trump has just delivered a masterclass in the ability of a president to turn power into wealth.
Editor's Note: This story has been updated to reflect the $TRUMP coin's latest prices.