How much is Trump’s new meme coin worth?

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Donald Trump’s re-election as President of the United States brought about many firsts. The launch of the official cryptocurrency on Friday may be the most surprising. This token has no inherent value. However, depending on how you look at it, it may be useful.

The president-elect’s new crypto breath with the $TRUMP badge was worth about $10 billion by Monday based on circulating supply, six times its market capitalization at its debut. This is a far cry from Bitcoin, the $2 trillion cryptocurrency giant. But it’s impressive for a so-called meme coin, ranking third behind dog-inspired digital assets Dogecoin and Shiba Inu. Another memecoin launched by Melania Trump had a valuation of $2 billion by Monday, narrowly edging out Fatcoin, a $2.5 billion token.

But what exactly is it? It says in small print that it’s not an investment, but rather a “show of support.” In other words, despite all the hype, $TRUMP is just a new twist on presidential collectibles like Red Maga caps and bobblehead dashboard dolls. It’s just that it’s less practical and the price is very volatile. Trump has already embraced merchandise into the digital age, emblazoning his image on a series of non-fungible tokens (essentially digital works of art), including depictions of Trump as George Washington and golden chess pieces. was lent.

$TRUMP has some value, even if it’s not necessarily a sound investment. First, this is a pretty strong statement of intent. President Trump has laid out plans to bring cryptocurrencies into the mainstream, including creating a U.S. crypto stockpile and appointing a crypto czar to his cabinet. His new coin comes just as Gary Gensler, head of the Securities and Exchange Commission, a regulator that has proven disastrous for would-be crypto innovators, has resigned.

To be sure, as currencies, neither Trump nor Melania’s tokens pass traditional tests, such as their adequacy as a medium of exchange. As far as more informal checks are concerned, it is unlikely that the kidnappers will demand a ransom in Melanian dollars. The circulation of both currencies is also limited to 1 billion tokens. That being said, the only real test of a currency is whether enough people accept it as a currency. In that sense, there is no reason why $TRUMP is inherently stupider than Doge, Tether, or any other digital bidding endeavor.

And if the Trump coin proves to have no lasting economic value, it could serve another function: live polling. But opinions are changeable. By Monday, $TRUMP had already soared 1,000 percent, before falling by a third, according to CoinMarketCap. The president’s reputation, as measured by the market in real time, could fade over time.

john.foley@ft.com