Trump made billions of dollars from issuing coins: a new type of political donation by American tycoons

Source: Feng Lun Fengma Niu

At 12:00 noon on January 20, Eastern Time, Trump completed his oath and officially took office as the 47th President of the United States. Although this is the real inauguration ceremony, the Trump family's carnival began a few days ago.

At 10 a.m. on January 18, Trump announced the issuance of the virtual currency "TRUMP" on social media. Within 30 minutes of the opening, the market value of the TRUMP token exceeded US$800 million.

On the evening of January 18, Trump and his family watched a grand fireworks show, which was one of the four-day inauguration celebrations. According to US media reports, in the name of the inauguration, the Trump team has raised more than US$170 million, and at the end of the ceremony, it is expected to raise more than US$200 million.

It is worth mentioning that five of the world's top ten richest people attended Trump's inauguration, including Musk, Bezos, Zuckerberg, Pichai (Google CEO), Bernard Arnault (LVMH President), Cook (Apple CEO) and Ambani (India's richest man).

The U.S. Capitol Hill reported that at the ceremony, technology giants, billionaires and their spouses sat in the front row, while some U.S. governors and politicians were relegated to the back row or even branch venues.

The Trump 2.0 era has begun, and the characteristics of grasping both power and wealth can be seen from the issuance of TRUMP coins and the inauguration ceremony. Today, let me share with you what special significance Trump's issuance of "air coins" has in addition to making money.

Source: Phoenix Finance

On January 18, cryptocurrency executives and enthusiasts dressed in tuxedos and floor-length dresses poured into the Andrew Mellon Auditorium in Washington, ready to celebrate the inauguration of Donald Trump, a leader who promised to be the most cryptocurrency-friendly president in American history.

"The reign of terror over cryptocurrency is over," David Sacks, a venture capital executive appointed as Trump's head of cryptocurrency, shouted.

How friendly can a president be to cryptocurrency? On the same day, Trump posted on his social account, announcing the launch of his personal Meme coin TRUMP. Users need to visit the website with the domain name "gettrumpmemes" to obtain the Meme token. The website shows that TRUMP is the only "official Trump Meme coin."

TRUMP coins have undoubtedly brought huge economic benefits to Trump. According to CoinGecko data, TRUMP coin started trading at an opening price of $0.1824. As of 3:00 p.m. on January 21, Beijing time, the token price has exceeded $30, with a market value of more than $7 billion.

The president's "coin issuance" immediately attracted criticism. A major issue of controversy is that the "GetTrumpMemes.com" website shows that 80% of the token supply belongs to Fight Fight Fight and CIC Digital, an affiliate of the Trump Group. On paper, Trump-related entities may receive billions of dollars in windfalls.

Analysts believe that Trump's move blurs the line between the role of government and commercial interests, and its essence is to use the president's international influence for profit. But looking at Trump's operations such as "making the United States the cryptocurrency capital of the earth", his intention is far more than that. Cryptocurrency may be given the mission of defending the hegemony of the US dollar.

1. The president "issues currency" and sells hundreds of millions of goods

"It's time to celebrate our victory! Join my 'Trump Community'. Get your TRUMP token. Go to gettrumpmemes.com. Have fun!"

On the eve of returning to the White House, Trump seemed to use a post to set off a frenzy in the cryptocurrency market.

"This is simply crazy," said Jordan Liebowitz, vice president of communications for the Washington nonprofit Citizens for Responsibility and Ethics. "For decades, we have seen presidents-elect take the time before their inaugurations to distance themselves from their finances to show that they have no conflicts of interest, and now we have a president-elect who, on the weekend before his inauguration, launches new businesses and promises to deregulate those industries... He does this only to blatantly exploit his presidency for profit."

The TRUMP coin was issued on the Solana chain. The token commemorates the image of Trump raising his fist and shouting the iconic battle cry "FIGHT FIGHT FIGHT" after surviving a shooting on July 13, 2024. The total supply of TRUMP coins is 1 billion, but only 200 million will be circulated initially, and the remaining 800 million will be gradually unlocked over the next three years.

The official website of the token stated that GetTrumpMemes is intended to express support and participation in the ideals and beliefs embodied in the "TRUMP" symbol and its related artworks, and is not intended to be the subject of an investment opportunity, investment contract or any type of security.

GetTrumpMemes is not political and has nothing to do with any political campaign or any political office or government agency.

After Trump's "one trillion" hype, the introduction on the official website now seems very ironic.

The token will bring a major conflict of interest to the newly elected president. Foreign governments or companies seeking to influence Washington may be inclined to buy the token to please Trump.

After the issuance of TRUMP coin, Trump's eldest son Eric Trump posted a post on the X platform to "stand up" for it, saying that the token is "a move by the family to enter an emerging business field." His remarks have exacerbated the moral concerns caused by the president's "issuance of coins".

Coinbase executive Nick Tomaino said on social media: "Trump owns 80% of the shares and launched it on the eve of the inauguration. This is a predatory behavior and many people may suffer from it."

Hedge fund manager Jim Chanos also commented: "The next four years will be the 'golden age of fraud'."

2. Part of "Make America Great Again"

TRUMP coin is not Trump's first foray into the field of cryptocurrency. Last year, after Trump won the election, he launched a so-called decentralized financial project called "World Free Finance" with his son Donald Trump Jr. and Eric Trump.

Over the past year, Trump has been vying for funds and votes from cryptocurrency investors. According to Politico magazine, cryptocurrency companies spent $10 million on Trump's inauguration alone.

In return, Trump is about to sign a number of executive orders supporting the crypto industry after taking office, including establishing a Bitcoin reserve, ending the "de-banking" policy, and nominating a number of "pro-cryptocurrency" officials to key positions. According to Bloomberg News earlier, the executive order may be issued as early as the day of the presidential inauguration, and Trump will give industry professionals a voice in his government. This speculation has become a reality.

After the inauguration ceremony on January 20, the White House announced that it had appointed Republican member Mark Uyeda as acting chairman of the U.S. Securities and Exchange Commission (SEC). Uyeda is popular among cryptocurrency companies. In an interview with Fox Business Channel, he disagreed with the SEC's previous strict supervision of cryptocurrencies, believing that the SEC failed to provide clear rules for cryptocurrency companies, causing many companies to face unnecessary legal risks, which had a negative impact on the development of the industry.

A careful observation will reveal that this move is part of Trump's "Make America Great Again" narrative.

It is worth noting that Trump was a skeptic of cryptocurrency in his first term, but in the 2.0 period, he turned into an active advocate of "making the United States the cryptocurrency capital of the world."

During this year's campaign, Trump repeatedly made it clear that he would establish a strategic reserve of cryptocurrency with "America first." His supporter, Senator Cynthia Loomis, submitted a strategic reserve bill to replace gold with cryptocurrency, and frantically called on the United States to repay its huge debts with cryptocurrency in the future.

One of the main reasons for the rapid change of position is that the Trump administration needs an alternative plan to maintain the hegemony of the US dollar.

SWIFT (Society for Worldwide Interbank Financial Telecommunication) data shows that as of November 2024, the share of the US dollar in the global payment market has fallen to 47.68%, less than 50%. The US dollar hegemony is declining, and cryptocurrency has been given a special mission.

In the 2.0 period of Trump, in order to escape the political fate of stepping down due to stagflation, he hopes to improve fiscal efficiency and total factor productivity through AI. However, if AI fails to achieve the expected results, deficit monetization will accelerate the process of "de-dollarization". In the past two years, gold has become a beneficiary of de-dollarization and a favorite of investors.

However, the US government cannot tolerate the monetary hegemony of the US dollar being shaken, so Trump needs an alternative plan to maintain the status of the US dollar. This alternative plan must be one that the United States can control and influence, and cryptocurrencies represented by Bitcoin have ushered in opportunities.

The essence of currency is credit. Trump's move is not only a businessman's nature to make a profit, but also to inject credit into cryptocurrencies.

3. A new type of political donation from American chaebols?

Tian Xiaowan, senior co-partner of Beijing Deheheng Law Firm, who focuses on cryptocurrency, said that Trump's TRUMP coin is a Meme coin, which is actually a community established to celebrate his victory in the election. As for the future direction of the community, the Meme coin's issuance instructions do not give a clear direction.

In Tian Xiaowan's view, this coin is a community-based currency and a type of air coin. The Dogecoin that Musk has touted many times before is also an air coin. This coin itself has no value, is relatively simple to operate, and has a low technical threshold. Anyone can issue it, but social drainage plays an important role in the issuance of air coins. Because of Trump's own identity and appeal on social media, many people buy it, which generates prices.

It is worth noting that unlike celebrity entrepreneurs' endorsements, this time is the first president in the world to issue virtual currency and support virtual currency in a high-profile manner, and Trump has therefore become the "cryptocurrency president." While opening up a new world of cryptocurrency, this has also caused some people to worry about questioning whether the president is using his position to make money.

On January 19, after Trump's wife Melania announced the issuance of the "MELANIA" token, the market's doubts became even stronger.

In Tian Xiaowan's view, Trump's issuance of new coins is not only a positive promotion of the cryptocurrency industry, but also, in order to win the president's continued support for cryptocurrency, people in the industry are likely to hype up the price of TRUMP tokens to achieve a win-win situation, which brings great hype risks. Some speculators use hype to raise the value, and then sell at the top of the market to reap the latecomers.

"This has gone beyond the traditional political donations and mutual assistance between American chaebols and political leaders."

Tian Xiaowan said that the U.S. Constitution will impose many restrictions on presidential power, but it is a new topic to restrict the president from using his influence to manipulate the price of cryptocurrencies in the web3.0 world.