Trump's meme coin tops US$10-billion market cap as he takes office

PARIS/SINGAPORE: US President Donald Trump's newly created cryptocurrency soared on Monday to more than US$10 billion in market value as he took office for his second term, drawing in billions in trading volume, while Bitcoin's price hit a record high, just hours ahead of Trump's return to the White House.

Launched on Friday, Trump's "meme coin", also known as $TRUMP, soared from less than US$10 on Saturday morning to as high as US$74.59 before giving up some of its huge rise on Monday.

Trump launched the digital token with branding including an image from his attempted assassination in July, expanding his cryptocurrency interests that already include World Liberty Financial.

Melania Trump launched her own coin, $MELANIA, on Sunday. Its rally pushed its market cap well beyond US$1 billion.

Four-fifths of Trump coin's tokens are owned by CIC Digital, an affiliate of Trump's business, and another entity called Fight, Fight, Fight, according to its website. It says the coins are "an expression of support for, and engagement with, the ideals and beliefs embodied by the symbol '$TRUMP'" and are not an investment or security.

The launch of the coins caused surprise and concern even among those in the cryptocurrency industry.

"While it's tempting to dismiss this as just another Trump spectacle, the launch of the official Trump token opens up a Pandora's box of ethical and regulatory questions," said Justin D'Anethan, an independent crypto analyst based in Hong Kong.

Cryptocurrency lawyer Preston Byrne published a blog post on Sunday, in which he predicted a 90 per cent probability of a civil lawsuit opposing the coin to occur within the next 14 days.

"Someone will lose money, some lawyer will come up with a theory and file," Byrne wrote, adding that, "The memecoin launch is, from a purely political perspective, an enormous unforced error."

Byrne declined to comment further.

The Trump Organization said this month the president would hand daily management of his multi-billion-dollar real estate, hotel, golf, media and licensing portfolio to his children when he entered the White House.

By 17.30GMT, Trump's coin was trading at $45.21, giving it a market cap of just over US$9 billion, according to CoinMarketCap, which ranked it as the 19th biggest cryptocurrency.

Twenty-four-hour trading volume was nearly US$40 billion, CoinMarketCap data showed.

Excitement over the so-called meme coins aided a wider rally in cryptocurrency prices as traders and investors grew more hopeful that Trump would keep his promise to be a "crypto president" by loosening regulations and promoting ownership of digital assets.

Several key figures in Trump's administration and his circles have ties to the crypto industry.

Bitcoin hit an all-time high of US$109,071.86 in early European trading before easing back to trade around US$105,297. The world's largest cryptocurrency has surged more than 10 per cent so far this month.

The Trump and Melania cryptocurrencies were created on the lesser-known Solana blockchain, which CoinMarketCap ranks as the third-biggest blockchain network.

The price of Solana's coin also rose over the weekend, hitting an all-time high of US$294.33 on Sunday.

"The cryptocurrency market gained additional popularity in recent hours due to the launch of the TRUMP and MELANIA cryptocurrencies just before the inauguration," said Grzegorz Drozdz, market analyst at Conotoxia Ltd, in a statement.

SPECULATIVE ASSETS

Peter Schiff, chief economist and global strategist at Euro Pacific Asset Management, pointed to the jump in $TRUMP's value and called it the new digital gold, on social media.

Trump's net worth is estimated by Forbes at US$6.7 billion.

The prospect of looser regulations around crypto policy has been met with fanfare by the industry and has turbocharged a rally in bitcoin following Trump's election victory in November.

The huge rise in the new coin prices prompted concern among some analysts.

"Meme cryptocurrencies, like these, are prone to large fluctuations and we generally consider them as speculative assets," Drozdz at Conotoxia said.

Trump's coin represented a blending of the world of decentralised finance into the political arena, but it also "blurs the lines between governance, profit and influence," D'Anethan said.

"Should public figures, especially those with such political clout, wield this kind of sway in speculative markets? That's a question regulators are unlikely to ignore," he said.

The websites for both Trump's and Melania Trump's coins avoid referring to them as cryptocurrencies, instead using the phrase "fungible crypto assets" in their FAQs.