A cartoon image of US President-elect Donald Trump holding a Bitcoin token to mark the cryptocurrency reaching over $100,000 displayed at a Coinhero store in Hong Kong, China, on in Hong Kong, China, on Thursday, Dec. 5, 2024.
Paul Yeung | Bloomberg | Getty Images
President Trump’s return the White House is expected to usher in a golden, if chaotic, age of crypto in the U.S., according to Bernstein.
Over the weekend Trump launched a meme coin, “Official Trump,” that rose to a market cap of $73 billion in two days before a 50% drawdown. The move came just as Gary Gensler, an opponent of crypto startups in his harsh enforcement approach as the head of the Securities and Exchange Commission, left his post.
One day after the Trump coin was revealed, First Lady Melania Trump launched her own meme coin to lesser fanfare. The splashy reveals drew criticism from many on social media, concerned it’s a bad look for an industry that has fought to distance itself from its early days of initial coin offerings (ICO) bubbles, non-fungible token (NFT) booms and celebrity crypto endorsements that led to investor losses.
That may be a short-term price to pay for a long-term goal of cryptocurrency innovation in a permissive regulatory environment, said Bernstein analysts led by Gautam Chhugani.
“Whichever way you see it, we think a new chaotic crypto era is here,” he said in a note published Monday. “The President of America has his own coin. Our view would be to view the event as a signal that a new crypto regulatory era is here to stay and invest in the more valuable parts of the ecosystem.”
“Given the previous U.S regulatory regime was about crackdown on crypto builders and enforcement actions on token-related activities, a token launch by the President, is a huge social signal to U.S builders: build away in the U.S, and don’t be shy of launching tokens,” Chhugani added.
The Trump meme coin was recently trading at about $38.41 on Tuesday, almost 50% off its high.
A disclaimer on the Trump coin’s website says it is “intended to function as an expression of support for, and engagement with, the ideals and beliefs embodied by the symbol ‘$TRUMP’ and the associated artwork, and … not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type.”
There are 200 million coins initially available, which will grow to 1 billion over three years, according to the website. Only 10% are available to the public, with another 10% held in liquidity and 80% to “creators and CIC Digital,” an affiliate of The Trump Organization.
The meme coin is the latest fundraising effort to come out of the Trump team – which has also launched two NFT collections – Trump Digital Trading Cards on the Polygon blockchain and Trump Bitcoin Digital Trading Cards on the Bitcoin blockchain – as well as the DeFi platform World Liberty Financial on Ethereum.
