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A cartoon depicting President-elect Donald Trump holding a Bitcoin token celebrates the cryptocurrency surpassing the $100,000 mark, as seen at a Coinhero store in Hong Kong, China, on Thursday, December 5, 2024.
WASHINGTON — President Donald Trump will need to wait an additional three months before he can begin trading his meme coin, the $TRUMP token.
Initially launched in January just before the president’s inauguration, the $TRUMP token was set to unlock a significant portion of insider-held tokens this month. However, the official X account of the Trump token announced this week that all major unlocks, including the initial cliff and the following three months of daily token releases, will be postponed by another 90 days.
Currently, only 20% of the total $TRUMP supply is available for trading. The remaining 80%, held by insiders, is subject to a three-year lockup plan, where tokens are released in phases.
Such lockup arrangements are intended to prevent “rug pulls,” a term in the cryptocurrency space referring to schemes where insiders sell off their holdings quickly, leaving other investors at a loss as prices plummet. Vesting schedules are designed to provide some confidence to retail investors that early backers will not liquidate their holdings immediately, which could adversely affect market stability.
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The $TRUMP token has exemplified the president’s inclination to capitalize on his political identity for financial endeavors. It experienced a rapid rise in market capitalization to $15 billion, supported by Trump’s posts on platforms like Truth Social and X that resonated with his supporters, including statements proclaiming, “It’s time to celebrate everything we stand for: WINNING!”
The token’s value spiked by over 50% on Wednesday following the announcement that the top 220 holders would be invited to a dinner with the president at his golf club near Washington, D.C. on May 22.
In response to these developments, Democratic Senators Adam Schiff of California and Elizabeth Warren of Massachusetts have urged the U.S. Office of Government Ethics to examine whether this promotion amounts to “pay to play” corruption.
Like many other meme coins, the $TRUMP token lacks a tangible product or service. Following its launch, First Lady Melania Trump quickly introduced her own cryptocurrency, $MELANIA, which initially reached a market valuation of over $2 billion before experiencing a decline alongside $TRUMP.
Shortly after the introduction of these tokens, the SEC issued a statement indicating that meme tokens do not qualify as securities, providing these projects with a degree of regulatory insulation for the time being.
Despite the trading limitations, the creators of the $TRUMP token have already accrued substantial profits. As reported by Chainalysis, the principal wallet managing $TRUMP generated over $350 million in USDC, a stablecoin pegged to the U.S. dollar, by functioning as a market maker and earning transaction fees on trades.
Additionally, the Trump family is exploring another cryptocurrency endeavor. World Liberty Financial, a decentralized finance initiative supported by the first family, has successfully raised $550 million through two token sales since October. Buyers cannot resell their tokens and do not receive any profit share; however, an entity associated with Trump is entitled to 75% of the net revenue, including proceeds from the token sales, according to documents reviewed by CNBC.
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