3 Reasons Trump’s Net Worth Increased by Investing in Crypto — Should You Invest Too?
Written by
Lydia Kibet
Edited by
Jenna Klaverweiden
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President Donald Trump’s family’s net worth has increased in recent months, with a significant chunk of that growth tied to cryptocurrency. A recent CBS News report estimated the Trump family’s net worth rose by $2.9 billion, 40% of which came from crypto-related ventures.
But financial experts warn that average investors may not be able to expect the same results. Here are three key reasons Trump profited from crypto and why those same factors might not apply to everyday investors.
He Created the Coin
Trump didn’t just invest in crypto; he created it. Much of the gains came from coins like $TRUMP and $MELANIA, which were launched and are largely owned by his companies. As reported by the State Democracy Defenders Fund, Axios estimated that 89% of Trump’s net worth was comprised of $TRUMP at its peak.
“Trump’s net worth rose because he held most of the $TRUMP coin supply. He minted it. His companies controlled 80% of the tokens,” said David Materazzi, CEO at Galileo FX. “Price spiked, he gained.”
In this case, Trump didn’t bet on a crypto; he created one. Average investors who are simply buying crypto, on the other hand, may not see the same profits.
Trading Fees Add to the Profits
Trump also earns fees each time the tokens are traded. That means revenue keeps flowing in even if the coin loses value.
“Trump profits as a coin creator, earning fees regardless of the coin’s performance,” said John Deaton, crypto law expert and founder of CryptoLaw. “The TRUMP meme coin generated over $320 million in trading fees for its creators, with the Trump family’s entities earning significant revenue even as the coin’s value decreased.”
While this boosted Trump’s net worth, 764,000 investors lost money on $TRUMP coin, according to a CNBC report.
Crypto Can Be Lucrative for Creators
Trump isn’t the only one who saw an increase in net worth because of crypto investments. Many other coin creators have seen similar windfalls. For example, as reported by Vox, there are reports that the creator of bitcoin, whose real identity is unknown, holds as much as 1.1 million bitcoin. At bitcoin’s May 28 trading price of about $108,900, that comes out to over $119 billion.
“This isn’t unique to the Trump family,” Deaton said. “Almost every meme coin ever created has benefited its creators and insiders, while retail investors have lost money.”
While crypto can be lucrative for those who build and launch tokens, it can be a different story for the average person. Cryptocurrency is notoriously volatile, and average investors should practice caution and never invest more than they can afford to lose when buying any crypto.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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