Buyers spent more than $140 million to snap up $TRUMP meme coins

On April 23, the digital currency got a boost when it announced that its top 220 holders as of May 12 would be invited to a dinner with the president.

Buyers spent more than $140 million to snap up $TRUMP meme coins in a bid to secure an invitation to an “intimate dinner” with President Trump, according to new data analysis from Inca Digital.

The digital currency, which is partly owned by an affiliate of the Trump Organization, got a boost on April 23 when it announced that its top 220 holders as of May 12 would be invited to a dinner with the president. That helped raise the value of the meme coin by more than 40% from the announcement through May 12, partially reversing an 88% slump in the weeks prior.

The top holders of the $TRUMP meme coin spent anywhere from as little as $53,500 to as much as $16.4 million to grab one of the dinner invites with Mr. Trump, Inca Digital’s analysis found.

As of the contest's end on May 12, the biggest holder of the digital currency was an account named Sun VIP, according to the analysis. While it's impossible to know the identity of any of the account owners due to the anonymity of digital wallets, many of the purchases were made through exchanges that don't accept U.S. customers, such as Bybit and Gate.io, Inca's research reveals.

"A ton of these users sent funds to international exchanges," noted Austin Ryan, director of marketing for Inca Digital, a firm that analyzes crypto data for risk issues like liquidity and front-running. "The thought is that if they are interacting with those exchanges, they are not in the U.S."

The dinner contest has raised concerns from government watchdogs and Democratic lawmakers about purchases of a Trump-branded asset being linked to access to the president. Also, because the $TRUMP coin is partly owned by CIC Digital, an affiliate of the Trump Organization, he and his family stand to benefit financially from purchases of the meme coin, critics add.

The @TRUMP meme coin site hasn't disclosed the identities of the 220 top holders, who under the promotion are in line to dine with Mr. Trump. Tony Carrk, the executive director of watchdog group Accountable.US, expressed concern because those holders are "shrouded by their anonymous crypto usernames."

The White House and the Trump Organization did not immediately respond to requests for comment.

The dinner will take place on May 22 at the Trump National Golf Club in Washington, D.C., according to the $TRUMP meme coin website. The top 25 holders will "will enjoy a Private VIP Reception with President TRUMP" as well as a "Special VIP TOUR," the site adds.

Earlier this year, Eric Trump, one of Mr. Trump's sons, called the $TRUMP coin "the hottest digital meme on earth."

How Trump makes money from his meme coin

Decentralization is foundational to cryptocurrency. Bitcoin, the world's most popular crypto, was born in the wake of the 2008 financial crisis as a digital currency meant to be uncontrolled by banks or governments.

$TRUMP meme coins can be traded on a decentralized exchange, which is essentially a place where traders can swap goods without a middleman.

Instead of matching buyers and sellers one by one, decentralized exchanges use something called a liquidity pool to ensure trades can happen easily and instantly. Liquidity pools are essentially an automated pot of funds that pair meme coins like $TRUMP with more popular types of crypto that can be easily traded.

When the $TRUMP meme coin was first launched, its creators initially released 20% of the planned 1 billion total coins. Half of that 20% was put up for public sale while the other half was put into a liquidity pool. CIC Digital and another company called Fight Fight Fight, which is helping to promote the meme coin, receive "trading revenue derived from trading activities" of the Trump meme coins, according to its website.

Through the liquidity pool, the creators of Mr. Trump's meme coins make money by charging tiny transactional fees on each trade. Those fees are used to generate more meme coins, which are then added to the liquidity pool to attract more traders. The process repeats itself in a cycle, according to a recent report by the Brookings Institution.

The Trump Organization did not immediately respond to a request for comment about how much revenue it has generated from the meme coin.

The meme coin also appears to be heating up interest in a new Trump-branded asset. Earlier this month, an NFT collection featuring images of the former president sold out within 24 hours. The Trump Organization did not respond to a request for comment about the NFT collection.

Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.

The Associated