What did Donald Trump do today?
He fluffed the price of his fake money.Hours before taking office for his second term, Trump issued a cryptocurrency token, $TRUMP. Like all cryptocurrencies, it has no inherent value. (Fiat currencies like the dollar do, because they are guaranteed to be accepted by the governments that issue them.)
In those first few days, the price of $TRUMP soared, either because it was a means of effectively registering a bribe to Trump without leaving an easy trace, or because buyers were pursuing the "greater fool" theory—hoping to immediately re-sell their stake in a worthless commodity at a higher price.
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| $TRUMP during the first two weeks of Trump's second term. The gray area at the bottom shows the trading volume, which surges at the start and then is reduced to almost nothing within a week. |
(The bribery aspect is not hypothetical. Justin Sun, a financier who was facing enormous civil fines and quite likely criminal charges from the SEC for fraud, bought $75 million in another Trump cryptocurrency. This appears to be what secured him a sudden reprieve from those charges immediately upon Trump taking office.)
Immediately after $TRUMP was announced, seasoned cryptocurrency traders noticed that Trump stood to make a fortune on the coins, not simply because he owned most of them and could crash the market at any time by cashing out, but because he took a fee for each trade.
When the dust settled, it became clear that some 810,000 buyers had lost money on the coin—while Trump himself profited on the order of $100,000,000.
Active trading in $TRUMP effectively stopped after that, meaning that Trump is making no further money on the "churn" of people foolish enough to buy his meme coin in the hopes of selling it for a profit. Today, he took action on that, "pumping" the stock on his boutique social media website in an attempt to goose trading.
It worked—for him. Trading volume soared, and with it, the fees that earn Trump money. Almost everyone who bought into the hype lost money, though, as prices crashed 7% from their momentary highs.
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Overall, Trump's market manipulation did increase the daily price by a few percent—but this will be cold comfort for the vast majority of buyers who paid six or seven times as much for it in the initial hype.
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| $TRUMP since inception. Today's "bump" is barely visible on the extreme right. |
Why does this matter?
- If it were anyone else doing it, this would be a penny-stock scam—except penny stocks still represent real companies.
- There shouldn't be an untraceable pipeline to bribe the President of the United States.
- And if there is, it shouldn't work this well.