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Your guide to what the 2024 US election means for Washington and the world
Donald Trump’s re-election as US president has brought many firsts. The launch of an official cryptocurrency on Friday might be the most surprising. This token has no inherent value. But depending on how you look at it, it may have some use.
Badged $TRUMP, the president-elect’s new crypto wheeze was worth about $10bn by Monday, based on the circulating supply, six times its debut market capitalisation. That is a long way from bitcoin, the $2tn goliath of crypto. But as so-called memecoins go, it’s impressive, ranking third after canine-inspired digital assets Dogecoin and Shiba Inu. A separate memecoin launched by Melania Trump notched up a $2bn valuation by Monday, narrowly behind $2.5bn token Fartcoin.
But what exactly is it? Not an investment, says the small print — more an “expression of support”. Put another way, for all the hype, $TRUMP is just a new spin on presidential collectibles, like a red Maga cap, or a bobble-headed dashboard doll, only with less utility and much more volatile price. Trump had already taken merch into the digital age, lending his image to a series of non-fungible tokens — essentially digital artworks — including depictions of him as George Washington, and a golden chess piece.
Even if not exactly a sound investment, $TRUMP does have some worth. For one, it’s a pretty potent statement of intent. Trump has indicated that his plan is to take crypto mainstream, including the creation of a US crypto stockpile, and the appointment of a crypto tsar to his cabinet. His new coin emerged just as Securities and Exchange Commission chief Gary Gensler, a regulator who had proven the scourge of would-be crypto-innovators, stepped down.
True, as a currency both Trump and Melania’s tokens fail the traditional tests — such as being a plausible medium of exchange. As far as more informal tests are concerned, no kidnapper is likely to demand a ransom paid in $MELANIA. The circulation of both currencies is also capped at 1bn tokens. That said, the only real test of a currency is whether enough people will accept it as one. In that sense, there’s no reason $TRUMP is inherently any sillier than Doge, Tether or any other attempt at digital tender.
And if Trump’s coin does not turn out to have durable financial value, it may serve another function: as a live opinion poll. But opinions can be volatile. Already by Monday $TRUMP had soared 1,000 per cent and then dropped by one-third, according to CoinMarketCap. Being valued in real time by the market is something the president may appreciate less as time goes on.
john.foley@ft.com
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