My Thoughts On The TRUMP Token Launch
To investors,
Bitcoin hit a new all-time high of $109,000 yesterday morning. The fact this new record occurred on the same day that President Trump was sworn into office, while Wall Street’s market was closed, is about as poetic as it gets.
But this wasn’t the big story of the weekend.
The talk of the last few days was the $TRUMP meme coin launched by President Trump and his team. The coin was announced just hours after SEC Chairman Gary Gensler walked out of his office Friday night for the last time.
Within hours, the TRUMP token reached a $10+ billion market cap. The all-time high for the market cap eventually hit more than $70 billion. Given that President Trump and his team own approximately 80% of the supply, this means they had over $55 billion of value to their name.
It is important to explain that Trump’s allocation of the supply was not liquid. The token structure has a 3-year vesting schedule and there are no team sales available for at least the first 3 months.
Many people will be confused how Trump’s meme coin could reach a $70 billion market cap, but you have to remember that Trump’s DJT stock is currently trading at more than $6.5 billion valuation on about $4 million of annual revenue.
Traditional stock market investors should be careful throwing rocks in a glass house when criticizing crypto’s lack of fundamentals.
So many of you are probably wondering — what does Anthony think about the TRUMP token launch?
The answer is quite complicated. First, the economic incentive for a large brand or celebrity to do this is obvious. There are not many people who would turn down the opportunity to capture billions of dollars in value.
Second, the structure and launch of the TRUMP token suggests that professionals were involved. This wasn’t a pump-and-dump meme coin, but rather a coin that was launched with multi-year vesting and the tools used increased the odds of the team not being able to exploit the early excitement.
Third, there are plenty of people who will criticize the President of the United States for launching a meme coin as he takes office. There are plenty of politicians like Nancy Pelosi who appear to have a significant advantage when trading with inside information, but we have never seen something like what we saw this weekend. There will be questions related to ethics and conflicts of interest.
Fourth, I have not been a big fan of meme coins in the past and I did not buy the TRUMP token. I understand why so many people did. I think it is important that these people have their right to buy the token protected. But it just isn’t for me. I have a different investment strategy.
Fifth, people are trying to judge the success or failure of this project after 72 hours. That is a great way to ensure your analysis is wrong. Instead, there are big questions that we need answered—what will the price performance be 2 years from now? Will the token be a true meme coin or will the Trump team incorporate utility into the coin? What will the Trump team do with the potential profits? I don’t have answers to these questions but that information will make the analysis much easier.
Sixth, Trump decided to launch the TRUMP token on the Solana blockchain. This may signal the changing of the guard between smart contract platforms. The last few bull markets have seen Ethereum be the smart contract blockchain of choice, but that feels like it officially changed this weekend. Solana did $30 billion in volume on Saturday, which is now 10% of Nasdaq’s daily volume.
Seventh, many people are excited about meme coins now that the President has launched one, but there is a strong argument that this launch will mark the top of the meme coin excitement. Who has a bigger brand than Donald Trump and the US President? I can’t think of one. This doesn’t mean the meme coins will go down from here, but it feels like Trump’s launch may signal something noteworthy about the market too.
Eighth, this coin launch seems to signal a different era for regulatory treatment of crypto. It is hard for regulators to go after market participants in the same way they have for the last four years if the President is launching meme coins. I don’t know how or where these changes will show up on a daily basis, but the shift feels obvious.
Lastly, I expect the next 4 years to be filled with uncertainty and increased volatility. Sometimes that volatility will be strategic and other times it will come as a second-order effect of the President’s style. We know Trump measures the success of the US economy by the stock market, and increasingly by the bitcoin price, so I anticipate both assets will continue to appreciate throughout the administration’s reign of power. The meme coin launch is just the introductory reminder to the fun, excitement, uncertainty, chaos, and challenges that exist with Trump driving the nation.
I am incredibly optimistic about the future of America. It was inspiring to see so many smart, influential tech leaders at the inauguration yesterday. There are significant obstacles facing the country right now, but the American people sent Donald Trump to the White House with a mandate to close the border, cut government spending, bring down inflation, make housing affordable, re-establish law & order, create a Strategic Bitcoin Reserve, refrain from entering any new wars, and ensure the future is brighter than the past for all the citizens.
Regardless of how you voted, we should all hope our leadership has the strength and courage to make the right decisions to fulfill this mandate.
Best of luck to the hard-working men and women of the administration who begin work to successfully accomplish their mission for the next 4 years.
God Bless the United States of America. 🇺🇸
- Anthony Pompliano
Founder & CEO, Professional Capital Management
🚨 READER NOTE: I am hosting Bitcoin Investor Week in NYC from February 24-28th. This will be the largest finance conference of the year focused on bitcoin. Speakers include Mike Novogratz, Cathie Wood, Jan van Eck, Anthony Scaramucci, Jack Mallers, and many others.
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James Lavish Discusses The Macro Environment & Possible Bitcoin Strategic Reserve
James Lavish is a Managing Partner & Portfolio Manager at The Bitcoin Opportunity Fund. He is also the author of a newsletter called ‘The Informationist.’
In this conversation we discuss the current state of the US economy, how we fix it, economic changes Donald Trump will make, inflation, why bitcoin should be added to everyone’s portfolio, tailwinds for bitcoin, bitcoin strategic reserve, global game theory, investing opportunities, and what James looks forward to in 2025.
Enjoy!
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"There will be questions related to ethics and conflicts of interest." Let's hope there is. Seems a bit ridiculous that a POTUS should get to mint Billions of dollars for his family overnight.
"I have a foreboding of an America in my children's or grandchildren's time, when the United States is a service and information economy; when nearly all the manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what's true, we slide, almost without noticing, back into superstition and darkness."
- Carl Sagan, "The Demon Haunted World" 1996