Tariff anxiety cuts Trump's meme coin wealth by $10 billion
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Tariff anxiety has hit the cryptocurrency markets hard, shaving about $10 billion off President Trump's paper wealth over the last week.
Why it matters: The launch of the Official Trump meme coin printed many billions of dollars of unrealized wealth for the president's company earlier this month, but it hasn't lasted.
The latest: Both Official Trump and the companion token, Melania Meme, have fallen precipitously on the (possible) eve of tariff enactment.
- Donald Trump's token is down 18% just over the last day, and Melania Trump's is down about 14%.
Between the lines: The two tokens were launched by companies controlled by members of the first family.
- Focusing on President Trump's, his company still holds 80% of the supply. A week ago, on paper, that meant about $24 billion. Today, it's more like $13.9 billion.
- In a way, even Trump himself is paying for the tariffs' impact on the economy.
The big picture: As tariffs on China, Canada and Mexico have gotten closer to actually going into effect, financial markets have fallen, cryptocurrency included.
- Over the last week, the overall crypto market has lost about $300 billion, or about 8%, and bitcoin, the market leader, has fallen solidly below $100,000 again.
Yes, but: It's unlikely that the Trump organization ever took the book value of their meme coin very seriously.
- Instead, it's likely banking on continuing to profit from trading fees on the coin, plus the actual cash returns from selling future tranches.
- It doesn't cost much to make a meme coin, so anything the company makes on token sales is nearly pure profit.
Context: Usually people talk about market caps as the value of all assets in existence (as with stocks), but in the digital assets world it's a little different.
- Market cap is usually used to refer to coins or tokens that are actually on the market (in the case of Official Trump, that's 200 million tokens, or about $3.5 billion).
- Fully diluted valuation refers to all the tokens in existence, even if they haven't been released yet (north of $17 billion, for Official Trump).
What we're watching: The next big tranche should unlock in March, dropping tens of millions of new Trump meme coins onto the market.
- Obviously, they would prefer to sell those for as much as possible, but even at $1 each that's a nice return for very little effort.
