Donald Trump's re-election as President of the United States marked many firsts. The launch of the official cryptocurrency on Friday was perhaps the most surprising. The token has no intrinsic value. But depending on how you look at it, it might have some use.
As of Monday, the president-elect's new cryptocurrency, which bears the "Trump" logo, was worth about $10 billion based on circulating supply, six times its initial market value. This is a far cry from the $2 trillion cryptocurrency giant Bitcoin. But as far as so-called meme coins go, it’s an impressive third, behind canine-inspired digital assets Dogecoin and Shiba Inu. As of Monday, another memecoin launched by Melania Trump was valued at $2 billion, just shy of the $2.5 billion token Fartcoin.
But what exactly is it? The fine print says this is not an investment but an "expression of support." In other words, for all the hype, $TRUMP is just a new version of presidential collectibles, like a red Maga hat or a bobblehead dashboard doll, only with less utility and more volatile prices. Trump has brought merchandise into the digital age, lending his image to a series of non-fungible tokens — essentially digital artworks — including depictions of him as George Washington and a golden chess piece.
Even if it's not exactly a sound investment, $TRUMP does have some value. One, it's a very powerful statement of intent. Trump has said his plans are to bring cryptocurrencies into the mainstream, including creating a U.S. cryptocurrency reserve and appointing a cryptocurrency czar to his cabinet. His new coin comes amid the ouster of U.S. Securities and Exchange Commission Chairman Gary Gensler, a regulator who had proven to be a scourge for would-be cryptocurrency innovators.
Indeed, as a currency, both Trump’s and Melania’s coins fail traditional tests—such as being a plausible medium of exchange. In terms of more informal testing, the kidnappers are unlikely to demand a ransom in $MELANIA. The circulation of both currencies is also capped at 1 billion tokens. That said, the only real test of a currency is whether enough people accept it as a currency. In this sense, there is no reason why $TRUMP is inherently dumber than Doge, Tether, or any other digital currency endeavor.
If Trump’s coin doesn’t prove to have lasting financial value, it may serve another function: as a real-time pollster. But opinions can be volatile. As of Monday, the Trump dollar had surged 1,000% before falling by another third, according to CoinMarketCap. Over time, the president may become less and less appreciative of the market's real-time valuations.
john.foley@ft.com