Late Friday evening, as the ‘who’s who’ of crypto joined BTC Inc.’s Crypto Ball to celebrate the Trump inauguration, Trump’s crypto team was at work launching TRUMP, the 47th President’s memecoin.
One billion, then two and onwards. By Friday night, TRUMP hit a $5 billion fully diluted valuation (FDV), surpassing almost every major mining stock we cover at Blockspace. By 4:00am EST, TRUMP would triple that value.
Binance, Kraken, OKX, and others raced to list TRUMP by Saturday morning. Newcomer retail app Moonshot added 400,000 new users in one day. By Saturday morning, the token reached over $70 billion in FDV.
(Note: A “Fully Diluted Value” takes into account the total supply of a token multiplied by the market price of a token, whereas many data sites will only take into account the available float multiplied by the token price. This can lead to a wide disparity in value).
Trump coin’s 80% allocation
Insiders normally win in crypto — and this is certainly the case for the Trumpster. For TRUMP, a single wallet currently owns 80% the token supply. The official website for the token lays out a high level plan for the token and includes allocations for various “creators,” plus more conventional activities like providing liquidity to on-chain orderbooks.
So only 20% of the token supply is on the market, and the Trump team has the ability to sell their stash into the available token float. In other words, there are still a lot of coins to sell to a euphoric market.
There’s more to be concerned about than the supply, though: a few other Trumps want in on the action, too. In a surprise Sunday night massacre for TRUMP’s price, Melania Trump launched her own competing memecoin. Markets were quick to move, cutting TRUMP’s valuation roughly in half in short order.
“Jamie, pull up the chart”
You don’t need to look any further than the Google Trends chart to see how this has impact interest in crypto. “How to buy crypto” is forecasted to surpass 2021 levels.
What does this mean for Bitcoin? A few thoughts:
- The memecoin trade is alive (and dead): AI memecoins plummeted in value as political memecoins may now be in vogue. Expect another cycle of rotation until the current trend falls out of grace.
- The crypto-state: Consider downstream effects including taxes, custody solutions, exchange listings, regulatory lenience, and more.
- A crypto-equity moment? Startups and crypto-native companies might move toward more permissive equity solutions involving tokens in the near term.
- Bitcoin is still king: Ephemeral phenomena like TRUMP or other tokens are entertaining, but they collapse over time. Bitcoin will continue to go from strength-to-strength as it sucks up memecoin liquidity over the next four years.
