Trump meme coin: Creators, few wallets gained millions, while 7 lakh small holders lost money, finds report

Around 7.64 lakh investors who bought United States President Donald Trump's meme token $TRUMP have lost their money, the latest analysis shows. A small number of 58 wallets made profits exceeding $1 billion collectively, while creators of the memecoin have raked in some $324 million in trading fees.

The memecoin, launched in January just days before Donald Trump took office, initially saw a surge of activity — jumping 300 per cent within hours of launch to $36 apiece, with its market capitalisation exceeding $14 billion at one point, according to CoinMarketCap data.

At the time of writing this, on May 8, the token was trading at $11.3 with a market cap of $11.3 billion, the data showed.

Most Small Wallets Lost Money in $TRUMP

According to a CNBC report, citing data from Chainalysis, as many as 764,000 wallets (which were mostly small users) that bought the $TRUMP meme coin lost their money. Comparatively, some 58 users made close to $10 million each, taking their collective profits to $1.1 billion, it added.

A total of 20 lakh wallets bought $TRUMP, according to Chainalysis data.

Notably, around 80 per cent of the US president's namesake coins are owned by Donald Trump-affiliated CIC Digital and Fight Fight Fight, details on the official website showed. They had not responded to CNBC's queries by the time of writing this report.

Insiders Making ‘Substantial Revenue’

The CNBC report cited sources to say that insiders have pledged to hold on to their tokens, but are making “substantial revenue” despite vesting restrictions. This is because the token's code automatically directs a cut of each transaction to these addresses, allowing the team to profit from ongoing activity.

Since its launch in January, Chainalysis data showed that over $324 million in trading fees have been routed to wallets tied to the $TRUMP coin creators.

Promotion Strategy: Dinner With Donald Trump

In what has renewed calls for scrutiny of “conflict of interest” investigations into Donald Trump's presidency, creators of $TRUMP memecoin recently launched a contest offerring top 220 holders prizes — including the chance to have a private dinner with Donald Trump for top 25 wallets on May 22 at the Trump National Golf Club in Washington DC, and possibly a VIP tour of the White House.

The announcement led to a burst of sales for the token, with price jumping 50 per cent, with as many as 54,000 wallets participating, data showed.

In January, crypto analyst Justin D'Anethan had told Reuters that the official Trump token “opens up a Pandora's box of ethical and regulatory questions”. Now, Democrats in the Senate Banking Committee are pushing to include legislation barring Donald Trump from profiting off of his meme coin and other cryptocurrencies, sources told Bloomberg. They have also launched an investigation into ownership of $TRUMP token, and its revenue model.

In the time ahead of his inauguration, the Trump Organization said Donald Trump would hand daily management of his real estate, hotel, golf, media and licensing portfolio to his children.

More recently, White House Deputy Press Secretary Anna Kelly in a statement said that Donald Trump's “assets are in a trust managed by his children, and there are no conflicts of interest”.

(With inputs from Bloomberg, Reuters)