Trump Insiders Closely Eyed as They Hold 80% of the TRUMP Token Supply

A new report from Bernstein says that the cryptocurrency market will closely examine the utilization of 80% of the Official Trump TRUMP/USD token supply held by Trump insiders in the coming days.

A new report claims that the cryptocurrency market will be closely watching how 80% of the Official Trump TRUMP/USD token supply, which is held by Trump insiders, will be utilized in the coming days.

The TRUMP token, which was launched unexpectedly on the Solana SOL/USD blockchain, reached a fully diluted market cap of about $73 billion. It traded over $30 billion in a day within 48 hours, soaring past Dogecoin DOGE/USD to become one of the largest meme coins in the market, before seeing a drawdown of around 50% from its highs.

The token’s launch was reportedly handled by CIC Digital, an entity linked to the Trump campaign, which had previously launched branded NFTs and merchandise.

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As the “strongest political figure” launching a token has been viewed by the industry as a sign that the U.S. is becoming more open to digital assets and that regulatory risk might decrease, a Bernstein report shifts the focus to the token distribution structure.

The report highlights that 80% of the token’s supply is held by wallets that are linked to CIC Digital, sparking concerns that these insiders might deploy this large supply, leading to losses for other investors and putting pressure on the token’s market value.

“The team could use TRUMP coin as collateral to build something useful in crypto banking & finance or build an engagement model to reward supporters/holders. Or it could use it as a treasury asset to fund more Trump-related political initiatives,” the report adds.

Given how blockchain-based market-making works, the report notes that the team is already earning a lot of revenue by providing liquidity to trading pools. Especially with how quickly the token reached a stratospheric market value, the 80% supply held by insiders does create some pressure on its market value,” it adds.

The report also touches on the regulatory landscape, suggesting that a major political figure launching a token marks a new era where crypto is being seen by governments as a tool to connect with the masses.

Despite this potential shift, the report notes that the current regulatory regime in the U.S. has been focused on cracking down on crypto builders and taking enforcement actions on token-related activities.

The president's token launch therefore signals a new era and may lead to new regulations.

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