TRUMP Token Holds 25% Value Post-Dinner Contest

In a recent newsletter segment, the cost of a dinner with the president was discussed. The final holder of the TRUMP token, which qualified for the dinner, held 4,196 tokens worth approximately $60,000 at the cut-off. However, the real cost of the dinner was around $6,000, considering a 10% loss if the tokens were sold immediately after qualifying. This was a significant bargain compared to a Super PAC that sold tickets for a "candlelight dinner" with the president for $1 million each, which is 166 times more expensive. Donors were also offered a one-on-one meeting with the president for $5 million, which was roughly on par with the 25-person VIP meetup for TRUMP token holders, costing about $240,000 for those who sold immediately after qualifying. Many holders sold their tokens as soon as they qualified, including several who reduced their holdings to 69 tokens, which might have consequences for their seating arrangements at the dinner. However, the 220th holder doubled their TRUMP holdings after the contest ended, indicating a true belief in the token's value.

Memecoins, which were once a significant part of the crypto market, have seen a resurgence in interest. Forgotten memecoins like Moo Deng have seen gains of up to 600% over the past week. There were also 63,000 new Solana-based tokens created in a single day, although their names and relevance are unclear. The list of memecoins that are up this week feels outdated, which could be a good sign that investors are moving towards more useful projects. However, memecoins still trade 14 times more volume than "project tokens," indicating that they still hold significant market interest. The purpose of securities regulation is to encourage retail participation in stock markets by giving people the impression that the playing field is level. If the crypto industry wants retail to participate in crypto markets, it might have to self-regulate in some way that gives people the impression that the playing field is level for crypto investors, too. Memecoins give the opposite impression, as only insiders appear to be getting rich from them. This is a problem because a game that doesn’t seem fair won’t last very long.

David Balin, formerly the chief investment strategist at Citi, cited Hyperliquid as an example of how traditional investors might diversify their investment portfolios. He noted that while memecoins and NFTs don't generate revenue, there are other crypto projects that do. He suggested that Hyperliquid, if it were a traditional company like Robinhood or Coinbase, would probably be worth 4 times its current market cap in the digital world. However, the math on this claim is unclear, as Hyperliquid trades on about 17 times revenue, while Robinhood trades on 17 times revenue and 34 times earnings. Hyperliquid probably has much higher margins, but even with 100% net margins, it would only be 2 times undervalued compared to Robinhood. On the other hand, the stock market values bitcoin held by Strategy at 2 times what it's otherwise worth and bitcoin promised to a SPAC at 3 times what it's otherwise worth. So, it's possible that Balin is right that the stock market would value Hyperliquid at 4 times what the crypto market does.

The TRUMP token has not given back all of its gains from before the dinner contest was announced, which implies that holders believe it will continue to have utility above whatever value it previously had as a memecoin. Specifically, the additional $700 million of market capitalization it’s retained might be seen as the present value of future TRUMP utility. TRUMP’s market cap is $2.6 billion, so it’s now 75% memecoin and 25% utility token. Relative to other ways of getting the president's attention, such as paying a lobbyist $600,000 or joining Donald Trump Jr.'s private club for $500,000, the TRUMP coin seems like a much cheaper option. While this is not the use case anyone was hoping for, it has real value.