Three days earlier than his presidential inauguration, Donald Trump launched a meme coin, a sort of cryptocurrency whose worth is buoyed by social media and web tradition, reasonably than any kind of performance or intrinsic worth.
The coin – formally known as $Trump – briefly ascended into the highest 15 cryptocurrencies by market capitalization and attracted over a half-million buyers.
Referencing the coin in a information convention on Jan. 21, 2025, a reporter asked Trump if he supposed to proceed promoting merchandise that benefited him personally whereas being president.
“You made some huge cash [on $Trump], sir,” he instructed Trump, who appeared oblivious to its meteoric rise in worth.
“How a lot?” Trump requested.
“A number of billion {dollars}, it looks like, within the final couple days.”
Over the next week, varied publications claimed the meme coin had “ballooned [Trump’s] net worth” making him a “crypto billionaire.”
Whereas it’s true that Trump stands to learn handsomely from the meme coin and his other crypto ventures, the claims of Trump himself incomes billions off it are overblown.
Humorous cash or filch?
Meme cash grew to become common in 2013 with the launch of Dogecoin, which its creators supposed as a joke, spoofing the various different seemingly ineffective cryptocurrencies that had been popping up on the time. It was by no means speculated to be a well-liked funding. The creators even tried to make it as undesirable as attainable to make sure it wouldn’t.
Twelve years later, it stays within the top 10 cryptocurrencies and has impressed hundreds of different meme cash to launch.
In 2025, it’s cheaper and simpler than ever to launch and commerce these tokens.
For instance, all it takes to create a brand new coin on the web site Pump.fun is a reputation, ticker image, description, picture and the equal of roughly US$5 price of cryptocurrency.
Moonshot, the crypto alternate that Trump’s meme coin web site routes consumers to, permits customers to enroll in as little as 10 minutes. They’re then in a position to buy the Trump coin and a slew of different meme cash.
The overwhelming majority of meme cash launched are doubtful. Many are outright scams. As an example, in August 2024 the Instagram account of McDonald’s was hacked to promote a meme coin named $Grimace in a nod to the fast-food chain’s purple mascot. After artificially inflating the value of the coin, the creators cashed out near $700,000.
There are numerous different rip-off cash that fly below the radar utilizing the identical dynamic: generate hype, pump the value and dump on traders.
Trying below the hood
So how a lot would possibly Trump and his associates really profit from his new meme coin and, extra broadly, the “free-for-all” angle his administration is taking towards the crypto trade?
I study the grey space between participation and exploitation in crypto markets, and I dug deeper into the Trump meme coin.
One strategy to assess whether or not a meme coin providing is a rip-off is to take a look at its “tokenomics” – that’s, the predetermined variety of items of its provide, how that provide is distributed and the way a lot of it the creator will get to maintain. The upper the proportion of the availability allotted to the creators, the extra they will promote for revenue. As media research scholar Lana Swartz factors out, creator tokens had been originally intended for builders to crowdfund their startups. However with meme cash – which generally don’t declare to construct something – they exist to counterpoint their creators and, probably, fund continued advertising and marketing of the coin.
Not like Dogecoin, which took a “fair launch” strategy – which means that its creators didn’t allocate a portion of the preliminary cash to themselves earlier than permitting others to commerce it – nearly all of Trump tokens are allotted to its creators on a three-year-long distribution schedule.
In reality, 80% of the coin provide might be distributed to the coin’s creators over the course of three years. In different phrases, the tokenomics of the Trump meme coin are arrange in order that its creators can slowly unload their giant provide with out drastically manipulating its worth. Moderately than shortly pulling the rug from below traders’ ft, they will do it slowly.
None of that is hidden data – the tokenomics of the Trump meme coin are featured prominently on the coin’s web site.
Notably, not one of the folks behind the coin will start receiving parts of the availability till March 2025. The quantity of revenue they will reap might be primarily based on future costs. On the time of this writing, the Trump meme coin was down roughly 60% from its peak.
Who’re these creators anyway? The varied layers of restricted legal responsibility corporations behind the challenge, listed in fine print on the $Trump meme website, obscure which people stand to learn.
Presuming Trump is one of these creators, the president technically doesn’t have an allotment of the availability to money out – not till March, a minimum of.
So, no, Trump didn’t make billions from the coin. However he nonetheless stands to probably vacuum up hundreds of thousands of {dollars} from unwitting traders. Judging by the spike in crypto exchange downloads over the weekend of the Trump coin’s launch, it attracted many new, and sure novice, speculators. Cash like this, which might considerably devalue in a matter of hours, might be distressing introductions to the world of investing.
This isn’t the primary time Trump has tried to make a killing on crypto, both. He’s already introduced in hundreds of thousands off the gross sales of five nonfungible token launches – that are basically digital buying and selling playing cards – since 2022.
Have enjoyable!
The ultimate phrases in Trump’s meme coin announcement on his social media platform Truth Social sum up his administration’s angle towards the crypto trade over the subsequent 4 years: “Have enjoyable!”
On Jan. 23, Trump signed an executive order containing a slew of decrees geared toward making the U.S. the “crypto capital of the world.”
He has tapped enterprise capitalist David Sacks to chair the group tasked with transforming the prohibitive laws across the crypto trade. Sacks has invested in crypto-focused companies and has bragged about his personal crypto investments on his podcast.
In a current Fox Business interview, Sacks was requested if he thought Trump’s meme coin was a battle of curiosity. He mentioned no, suggesting that the cash must be considered “collectibles” akin to “a baseball card or a stamp.”
Notably, the $Trump website additionally refers back to the tokens as “playing cards” and “memes,” reasonably than cash. This could possibly be an try and skirt authorized bother: It frames them as tokens of mere amusement reasonably than critical funding automobiles with expectations of revenue.
Nonetheless, a number of members of Congress have already called for a probe into the Trump meme coin.
Regardless of the way you outline $Trump, one factor stays clear: The construction of the coin is about as much as siphon cash out of retail traders for a minimum of the subsequent three years. Positive, atypical speculators can nonetheless revenue off it, as long as its worth stays propped up. That’s mainly a big gamble.
With Trump starting to accumulate a stockpile of various cryptocurrencies by his different enterprise, World Liberty Financial, he may additionally profit immensely from a looser regulatory setting.
Enjoyable certainly.
