Donald Trump’s TRUMP memecoin has pulled in at least $11.4 million in fees for entities tied to the president, according to a Jan. 28 report from Bloomberg. The memecoin, which launched on January 17, just before Trump’s second inauguration, quickly became a focal point in the crypto community, with its market cap surging to over $14 billion shortly after release. CIC Digital, Fight Fight Fight LLC, and liquidity pools The memecoin debuted on the decentralized finance (DeFi) platform Meteora, built on the Solana blockchain. It was launched under the sponsorship of CIC Digital LLC and Fight Fight Fight LLC, two entities closely linked to Trump. These organizations control 80% of the token’s supply, which is locked in liquidity pools and set to unlock over the next three years. Tarun Chitra, CEO of Gauntlet, said in an interview with Bloomberg that the fees generated by these entities came from liquidity provided to support trading activity. Liquidity pools allow users to trade the memecoin directly from their wallets, with fees collected from each transaction. “The Trump token’s liquidity pools on Meteora have brought in fees that rival some of the best days of memecoin trading we’ve seen,” Chitra explained. DeFi platforms like Meteora rely on algorithms rather than intermediaries to carry out trades. Users can add liquidity to trading pools and earn fees in return. The majority of the liquidity for the Trump memecoin is controlled by the Trump-linked entities, according to data tracked by Gauntlet. The platform’s smart contracts record every trade and transaction fee. When the token launched, 200 million $TRUMP tokens were made available, and the supply is expected to grow to 1 billion over the next three years. Massive fees and centralized exchanges According to data from crypto risk modeling firm Gauntlet, tens of millions of $TRUMP tokens were sent to centralized exchanges like Binance and OKX shortly after launch. These exchanges have less transparency than DeFi platforms, making it difficult to calculate the exact trading profits. On January 19, TRUMP hit an all-time high above $80 before crashing 60% to around $28 as of press time, according to data from CoinGecko. Even with these swings, Trump’s memecoin is the most successful individual memecoin launch in crypto history. To put the numbers into perspective, Pump.fun, the platform where users create their own memecoins, once generated $16 million in daily fees at its peak across hundreds of tokens. By comparison, Trump’s memecoin has nearly matched that daily figure with just a single coin. ETF industry rushes to capitalize on $TRUMP The frenzy surrounding the Trump meme coin has spilled over into the exchange-traded fund (ETF) market. Rex Financial and Osprey Funds have already filed with the U.S. Securities and Exchange Commission (SEC) to create a $TRUMP ETF. If the SEC does not raise objections within 90 days, the fund will be approved automatically. Rex and Osprey are also seeking approval for ETFs tied to Dogecoin, which surged in popularity under Elon Musk, and Bonk, a memecoin based on a viral internet joke. Bitwise, which manages over $4.5 billion in crypto assets, filed preliminary paperwork for a Dogecoin ETF in Delaware just a few hours ago. The proposed memecoin ETFs have gotten a ton of criticism from industry analysts. Nate Geraci, president of The ETF Store, pointed out that most memecoins trend toward zero value over time. “Offering memecoin ETFs could hurt the reputation of any firm that wants to be taken seriously on Wall Street,” he said. But the changing regulatory climate under Trump has emboldened ETF issuers. Paul Atkins, an early Bitcoin lover, and Trump’s pick to lead the SEC, has been seen as a game-changer for the industry. Under the last guy, Gary Gensler, the regulator was quite hostile to crypto, with Bitcoin ETFs only debuting after a lengthy legal battle. Matt Hougan, chief investment officer at Bitwise, said, “There’s been a major shift in how the SEC approaches crypto under the new administration. We’re seeing a wave of innovative filings, and I expect that trend to continue.” Still, Geraci believes anything is possible in the current environment. “At this point, the SEC could approve memecoin ETFs, given the right conditions,” he said. Cryptopolitan Academy: How to Write a Web3 Resume That Lands Interviews - FREE Cheat Sheet
