How Trump Profits from $TRUMP

On Sunday, President Trump used his social media platform, Truth Social, to promote his eponymous meme coin, $TRUMP.

On Sunday, President Trump took to his social media platform, Truth Social, to continue promoting his eponymous meme coin, $TRUMP.

“The TRUMP coin is doing GREAT and the market is SLUSH. A TRUMP supporter.”

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The post comes a few days after Trump last promoted $TRUMP on January 17. Buoyed by his impending inauguration, $TRUMP had reached a peak of $75.35 on January 19—a market cap of almost $15 billion for the 200 million coins initially released.

However, within a few days of the launch, the price of $TRUMP dropped drastically, plummeting to less than $20 by February 1. More than 800,000 retail investors, including many Trump fans, had collectively lost over $2 billion on $TRUMP. Those losses have only increased as the price continued to decline, sinking to below $11 before Trump's latest post.

Despite the retail investors’ losses, a select group of large investors were able to rack up huge profits through exquisitely timed transactions.

One trader, known only by the code at the end of their crypto wallet, J9tXv, purchased $1.1 million worth of $TRUMP within 2 minutes of Trump's initial announcement. As the price surged, J9tXv sold their $TRUMP coins rapidly, eventually earning tens of millions in profits. Other large traders purchased hundreds of thousands of coins within minutes of the announcement and then profited by selling them quickly. According to one analysis, “fifty of the largest investors in the coin have made profits in excess of $10 million each.”

Experts consulted by WIRED believe the trading behavior of large investors in $TRUMP suggests they were tipped off.

“To be that quick off the mark, it’s hard to imagine that they had no forewarning,” said Paul Sibenik, the CEO for CryptoForensic Investigators, a firm that investigates crypto cybercrime. Similarly, John Powers, president of the private investigation agency Hudson Intelligence, suspected “potential advanced insider knowledge.”

Meme coins, which have no inherent value, are especially vulnerable to “pump-and-dump” schemes where celebrities or others with large audiences hype up a coin as insiders with superior information quickly take profits.

Investors in $TRUMP, according to the official website, “"unleash the right to bring a class action lawsuit in relation to the meme coin" or pursue damages based on "deceptive practices" or "misinformation."

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How Trump profits from $TRUMP

Along with a select group of large investors, the other major winner was Trump himself. An entity owned by Trump, Fight Fight Fight LLC, owns 80% of $TRUMP—about 800 million coins. Right now, those coins are ‘locked’ and cannot be sold by Trump. But, beginning in mid-April, the coins will be unlocked in tranches, which would allow him to sell the coins for cash. Over the course of Trump's presidency, all 800 million coins will be unlocked. Even at $10 per coin, that is an $8 billion windfall. So Trump has a huge incentive now, and in the future, to make sure that the price of Trump does not sink too low.

Anyone—including foreign governments—can purchase $TRUMP anonymously, boosting the value of the coin and enriching Trump.

Trump's Truth Social post on Sunday initially had the desired impact, spiking the price of $TRUMP by more than a dollar in the minutes after posting. As the afternoon wore on, however, $TRUMP relinquished most of its gains.

No matter what the current price, Trump also earns “revenue derived from trading activities” of $TRUMP. The details of this arrangement are opaque, but analysts told Reuters they believed that Trump-controlled entities earned “between $86 million and $100 million in trading fees” through the end of January.

How Trump monetizes the presidency through $TRUMP

On a basic level, $TRUMP allows Trump to convert the power and prestige of the presidency into cash. Meme coins have no inherent value, and prices are determined by how much buzz and hype their creators can generate. As president, Trump has the largest megaphone in the world, and he is using it to increase interest in $TRUMP.

But there are also slightly more subtle ways Trump is leveraging the presidency to boost the value of $TRUMP. There are tens of thousands of new meme coins minted each day on sites like pump.fun. Almost all of them generate no interest or significant value. Part of this is simply that people never even hear about these coins. But another limiting factor