$TRUMP and $MELANIA Coins Fall Flat

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The last few weeks have been big ones for the United States of America.

One week ago, we celebrated Martin Luther King Jr. Day. As divided as we may feel as Americans right now, there has to be an acknowledgment of the progress that we have made in the last 50 years on race relations.

There is (and always will be) more to be done. But as Americans, we should be proud of the progress we have made. The America of today is a completely different place from the one I was born into.

We also saw the inauguration of Donald J. Trump as our 47th President.

Here’s the most interesting bit about the event…

Ask yourself this: if you knew Trump would win again, would you have expected a “quiet” transition?

After the political violence and rioting that we have seen since the COVID period, it would have been reasonable to expect mass protests and disruption.

Instead, we saw a quiet and orderly transition of power.

Both of these events speak to the progress of America. Despite our challenges, we move forward and create a better country and world.

Every day, I am proud to be an American.

We are not perfect, though. And for as many steps forward we take as a nation, there are (unfortunately) some big steps backward.

We also saw a couple of those last week. Let’s talk about them…

Two Steps Back…

For starters, there were the mass pardons bestowed by outgoing President Joe Biden.

In the hours and minutes leading up to the transition of power, Biden pardoned numerous controversial figures who had been involved in his administration. These were all people who had considerable conflict with the Trump camp.

They included the former Chief Medical Advisor to the President Dr. Anthony Fauci, former Chief of the Joint Chiefs of Staff General Mark Milley, and former representative Liz Cheney.

These were preemptive pardons which means they were given protection from any potential charges. There was also a statement saying that these pardons did not presume any guilt or that they did anything wrong.

In general, we support the rule of law. We would prefer that our legal system have an opportunity to play its proper role. These types of pardons short-cut that system and prevent it from being a part of our checks and balances.

That being said, I am somewhat relieved that we will not see an ongoing legal campaign involving these people — that is not in the best interest of America.

Much more troubling than Biden’s pardons for Trump’s political foes was the fact that he also pardoned a vast swath of his FAMILY with less than 20 minutes left in his presidency.

Again, he went out of his to emphasize this did not imply guilt.

As he would say, “C’mon, man!” After granting a pardon and blanket immunity to his son Hunter previously, he did the same now for his three siblings and their spouses.

The fact that he did just minutes before leaving office gives the worst possible impression.

Again, we are opposed in general to these blanket pardons while admitting they may calm down the political noise. In this way, they are a mixed bag.

Doing this the way he did though — and not when he did the Hunter pardon — stinks of a cheap amateur crime family. This was a disgrace to the Office of the President.

Unfortunately, these actions came at the end of a weekend where we saw something similarly (if not more) disgraceful out of the Trump camp.

A Presidential Meme

On Friday, January 17 companies affiliated with Trump and his family released a Trump-themed meme coin with little or no fanfare.

If you’re unfamiliar with meme coins, they’re a type of cryptocurrency originally from an internet meme or some famous personality.

Perhaps the most famous of these meme coins over time has been Dogecoin, named after a type of dog called a Shiba Inu.

They have no value or utility whatsoever and are essentially one big joke. Think of them like digital baseball cards that either in on the joke or represent the celebrity involved.

As we often discuss, though, any asset is worth whatever anyone else is willing to pay for it. If enough people believe it and are willing to support it by buying and selling it, then it can be worth anything.

The current market capitalization of Dogecoin is $51 billion!

Trump and his team introduced their coin ($TRUMP) on social media several hours after it was made available to the market.

The dedicated website described it as the “only official Trump meme,” and its logo is a cartoon image of Trump raising his fist after surviving the July 2024 assassination attempt.

I won’t get deep into the details. But it was first introduced in a way that only more knowledgeable crypto investors could accumulate it. The Trump-affiliated companies also kept 80% of the coins that were created.

From a starting price of $7, $TRUMP quickly traded to above $70 by Sunday. This gave the total project a value of almost $75 billion and Trump’s stake was worth more than $50 billion.

By Sunday, the same groups released another coin, this time themed around his wife Melania. That coin is called $MELANIA.

It also soared but quickly took away from the value of $TRUMP, which got cut in half.

The way the projects are built, they now can sell these coins over a three-year period.

In theory, the value of the coins held by the Trump-affiliated organization is tens of billions. If they were able to sell them at or near these values, then this would be the single biggest money-making endeavor of Trump's career by far.

What do I think of these crypto ventures?

We Can Do Better

I think they are disgusting and gross.

I don’t begrudge any individual American the opportunity to go out and introduce a meme coin. If you can do it and make a lot of money, great.

I do, however, think that our public officials — especially the President — should be held to certain standards of behavior.

Maybe that makes me naïve and not built for the current world, but I don’t care.

We set the bar high for America and our officials. As Americans, doing so is one of the reasons WHY we have had the success that I spoke about at the start of this note.

What does any of this have to do with trading and investing?

The reason our stock markets are so successful is because we have made the progress we discussed above. It is because we set the bar high for behavior and accomplishments.

If we stop holding ourselves accountable, then we risk slipping into corruption and the political malaise that has led to the relative decline of the rest of the world's economies.

My other major problem is that there will likely be millions of individual investors who are fans who will go out and buy these meme coins. Many (most) of them will lose almost everything by investing in them.

If they did so by buying Dogecoin (or another recent favorite Fartcoin), then it’s buyer beware. We can’t stop people from making mistakes with their money.

When they do so, however, buying a worthless coin officially backed by our President they are made vulnerable to manipulation.

It is the duty of those of us who understand the markets to put this out in the public form and try to protect those who don’t have this knowledge.

Those people are also the people who can least likely afford to lose the money.

As well as we have done in America with progress, we need to be vigilant and do better.

Last week included some great highs for American progress — but also some disgusting lows.

We can do better.