In the cryptocurrency realm, meme coins are often considered jokes with little intrinsic value. However, the Trump family has transformed their president-themed meme coin into a source of significant cash and access to the former president.
Since its launch earlier this year, the coin has generated over $320 million in fees for its creators, according to Chainalysis, a blockchain analysis firm. On May 22nd, Trump is hosting a dinner at his Washington-area golf club, open to those who purchase enough of the coins.
The top 220 holders of the meme coin will attend the dinner, while the top 25 will also join a reception with Trump. The coin’s website encourages buyers to inform the president of their holdings.
Trading activity surged after the dinner announcement, boosting the coin’s price. However, the Trumps don’t need to sell coins to profit, as they earn from trading fees.
Decentralized exchanges, which allow traders to swap goods without intermediaries, use liquidity pools to ensure easy and instant trades. These pools pair meme coins like $TRUMP with more popular crypto types.
Initially, 20% of the planned 1 billion coins were released, half for public sale and half for the liquidity pool. CIC Digital, an affiliate of the Trump Organization, and another company receive trading revenue from the meme coins.
Through the liquidity pool, creators earn by charging small fees on each trade. Nicolai Søndergaard, a research analyst at Nansen, explained, “You only care that there is continuous volume because the more volume there is, the more trades and therefore more fees for you.”
In the week after the dinner announcement, creators made over $1.3 million in trading fees. The coin’s value jumped from about $9 to $14, trading around $11 on Monday afternoon.
Trump downplayed profits during an interview, dismissing the idea that he profits from the presidency. The team behind the meme coins heavily promotes the dinner opportunity.
Critics argue the pseudonymous nature of cryptocurrency allows bad actors to influence the president through purchasing his digital assets. The Trump meme coin website assures registrants that their legal names and contact information will remain private.
— new from AP News