Skyrocketing Trump meme coin creates billions out of thin air, sparking warnings for investors

An official Trump meme coin has skyrocketed by more than 40,000 per cent since Friday, creating billions of dollars out of thin air.

An official meme coin launched by Donald Trump has skyrocketed by more than 40,000 per cent since Friday, creating billions of dollars in “value” out of thin air while sparking warnings for investors and condemnation from critics.

The $TRUMP coin was trading at around $US75 on Sunday, US time — up from just 18 cents at launch — with a market cap of more than $US13 billion ($21 billion).

Most of the meteoric rise took place over Saturday night, when the coin doubled in value in the final hours before Mr Trump’s return to the White House.

Barstool Sports founder Dave Portnoy was one high-profile gambler to cash in after announcing on X on Saturday that he bought $US500,000 ($806,000) worth of $TRUMP due to “FOMOOSC — fear of missing out on s**t coins”.

“I just woke up,” he wrote in a Sunday follow-up.

“Checked $TRUMP coin. I’m up 200 per cent since I bought it yesterday. Sold it. Made a quick milly. Prob gonna put it on the Bills tonight. I love Trump’s America! Now I’m going back to sleep.”

X user John Trades MBA pointed out one original investor was still holding their original $US1 million ($1.6 million) position they bought at 18 cents — currently valued at $US361 million ($582 million).

“I don’t get it,” one person commented. “Why wouldn’t you sell at this point. $361M. You’re set for life. You won. Why risk it? But I guess that’s why I’m one of the poors lol”

Another speculated, “It’s the Trump family or proxy. Of course they are holding. They know where to sell. Rich get richer.”

Donald Trump has vowed to be the ‘crypto president’. Picture: Jon Cherry/Getty/AFP

President-elect Trump announced the surprise launch of his $TRUMP cryptocurrency on Friday night, sparking a buying frenzy two days before his inauguration.

“My NEW Official Trump Meme is HERE!” Mr Trump posted on Truth Social. “It’s time to celebrate everything we stand for: WINNING! Join my very special Trump Community. GET YOUR $TRUMP NOW. Have fun!”

The website for token, which launched with an initial supply of 200 million and will grow to one billion over three years, calls Mr Trump “the crypto president” and encourages fans to “get your piece of history”.

It features a slimmed-down image of the President-elect holding up his fist with the words “fight, fight, fight”, describing the moment from the July 13, 2024, assassination attempt as “the most memorable meme of the century”.

Meme coins are lighthearted cryptocurrencies with little utility or fundamental value, as they are typically not linked to any underlying business, but are popular among some traders looking to make quick gains due to their extreme volatility.

They are, in other words, generally understood by most who invest in them to be a way of gambling on a joke — in the hope they can sell for a profit before it stops being funny.

“This is a revival of the meme coin trend we saw in 2021 and 2022, where many young, inexperienced investors got burned by extreme volatility,” deVere Group chief executive Nigel Green said in a statement.

“Without doubt, investors will get burned by this frenzy too.”

The official Trump meme coin launched on Friday. Picture: Supplied

The Trump Meme coin is based on the Solana blockchain, a popular platform used for launching meme coins which often turn into pump-and-dump schemes.

“Trump Memes are intended to function as an expression of support for, and engagement with, the ideals and beliefs embodied by the symbol $TRUMP and the associated artwork, and are not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type,” the website’s fine print states.

“GetTrumpMemes.com is not political and has nothing to do with any political campaign or any political office or governmental agency.”

An 80 per cent share of the token is owned by Trump Organization-linked CIC Digital LLC and related entity Fight Fight Fight LLC.

According to Axios, Mr Trump’s stake in $TRUMP is now worth about $US58 billion ($94 billion).

The venture is the latest in a series of merchandise released by the Trump Organization in recent months, which has also been peddling Trump-branded sneakers, fragrances, Bibles and digital trading cards.

The Trumps have also been promoting World Liberty Financial, a crypto trading platform in which they have financial ties.

“I am extremely proud of what we continue to accomplish in crypto,” Eric Trump, who heads the family organisation, posted on X. “$TRUMP is currently the hottest digital meme on earth and I truly believe that @WorldLibertyFi will revolutionise DeFi/Cefi and will be the future of finance. We are just getting started!”

Mr Trump returns to the White House on Monday. Picture: Eric Thayer/Getty/AFP

Danielle Brian, executive director of the nonpartisan Project on Government Oversight, told Bloomberg the meme coin was just the latest breach of ethical norms by the President-elect.

“Any effort the Trump Organization was making to demonstrate they were concerned about potential conflicts, specifically where it comes to foreign governments — this seems to entirely undermine,” she said.

Mr Trump announced the launch after hosting a black-tie event for the crypto industry in Washington DC, sponsored by the likes of Coinbase, Solana, MicroStrategy, Kraken, Galaxy Digital and others.

“The reign of terror against crypto is over, and the beginning of innovation in America for crypto has just begun,” venture capitalist David Sacks, who has been appointed as the new administration’s incoming crypto czar, told the cheering audience.

Fellow pro-Trump VC Marc Andreessen had previously accused the Biden administration of waging war against the crypto industry by “debanking” dozens of founders and start-ups.

“We’ve had like 30 founders debanked in the last four years,” Mr Andreessen told podcaster Joe Rogan in November.

“It’s been a big recurring pattern. This is one of the reasons why we ended up supporting Trump. We just can’t live in a world where somebody starts a company that’s a completely legal thing and then they literally get sanctioned, embargoed by the US government. No due process, none of this is written down, there’s no rules, there’s no court, there’s no decision process, there’s no appeal. Who do you go to to get your bank account back?”

During his administration, Mr Biden appointed officials who tried to crack down on the industry — passing laws that make it difficult for traditional institutions to hold cryptocurrency.

Lawmakers and regulators saw the industry, which remains wildly speculative, as something to be tamped down rather than grown carefully.

— with NY Post

Originally published as Skyrocketing Trump meme coin creates billions out of thin air, sparking warnings for investors