Trump’s broken promise on crypto: a gold mine for his empire, multimillion-dollar losses for investors

“I made a fortune with Trump’s memecoin, but I lost it all the following month,” a user on X admits. “It’s a perfect Ponzi scheme,” says another. “It’s a scam, a fraud.” On other social platforms there are thousands of comments like these, ranging from investors asking “What did you expect?” to others who watched their savings vanish after chasing the promise of quick gains.

Donald Trump returned to the White House promising to usher in a new era for crypto. He stoked the enthusiasm of thousands who gambled on a market legitimized by the president himself. But the outcome has not matched expectations. Not only has he broken many of his promises, he has exposed a contradiction in his own populist rhetoric: while presenting himself as a defender of investors’ freedom and of a sector born to challenge traditional elites, he has multiplied his own fortune through his crypto businesses even as many others have suffered multimillion-dollar losses.

Despite his past as a crypto skeptic — he once called them a “scam” — Trump re-entered the 2024 campaign as a bona fide cryptobro. With grandiose proclamations, he vowed repeatedly that he would reverse the Biden administration’s hostile stance toward cryptocurrencies. Meanwhile, his children founded World Liberty Financial (WLF), a company dedicated to trading digital assets.

Trump’s conversion to the crypto universe does not stem from deep ideological conviction or in-depth knowledge of the sector. The logic behind the shift is purely economic: the industry became a gold mine for his business, to the point of becoming a top donor in midterm elections. That’s why he jumped on the crypto wave. Before long, Trump became one of the sector’s loudest megaphones and took an unexpected step: launching the memecoin $TRUMP.

The cryptocurrency, backed by no underlying asset and intended simply as a show of support for the president, at one point reached a market value of more than $10 billion. But it collapsed within hours, leaving most investors empty-handed. A report by crypto analytics firm Nansen, cited by U.S. media, estimates that nearly one million investors who bought $TRUMP lost at least $3.81 billion.

The U.S. president, by contrast, reported $1.4 billion in cryptocurrency income in the first year of his second term, according to his financial disclosure. Of that amount, $635 million came from sales of his memecoin through the company CIC Digital. Even though the asset lost nearly all its value (down 97% since launch and now worth $600 million), he profited regardless of whether its price rose or fell because he earned fees whenever someone traded the tokens — trades he himself encouraged: he hosted exclusive dinners for his investors and launched a video game that simulated his life and used the token as its currency.

Trump has faced harsh criticism over his dealings in these digital assets. He has been accused of a conflict of interest for promoting policies favorable to the financial products he profits from. “He is enacting policies that benefit the crypto industry. But under the surface of this policy posture is a sweeping self-enrichment scheme that has seen the president and his family profit handsomely, including from deals with foreign nations” says the Center for American Progress (CAP), a progressive think tank.

Reddit has been the scene of heated debates about the president’s digital assets and the losses suffered by thousands of users. When the platform’s AI was asked to summarize conversations containing the words “Trump” and “cryptocurrencies,” it distilled opinions into three lines: “Many believe Trump enriched himself with crypto while others lost money.” “Users say Trump’s coins worked as bribes or money laundering.” “Several see the coins as a pump-and-dump or a rug pull that ruined retail investors” — two types of scams used to manipulate a financial market.

But he did not enrich himself solely with the memecoin. At the height of the crypto boom, driven in part by his own policies, Trump and his associates launched WLF, one of The Trump Organization’s most valuable assets, the corporate umbrella through which the president’s family groups its businesses. With that company they signed dozens of deals and alliances with various firms in the sector. Part of the business involved accumulating partners’ tokens in a sort of strategic reserve.

In this way, they padded their coffers with little-known assets — cryptocurrencies that, thanks to the Trump effect, rose in price. According to a Nansen analysis for Bloomberg, tokens typically appreciated between 10% and 26% in the 24 hours after WLF purchases. But that boost was short-lived.

When the crypto market fell, prices of all assets plunged. Doubts about the viability of a business model based on token accumulation deepened the declines, stalling many announced deals that never materialized while the company sold its positions.

In most cases, an investor who bought those tokens after WLF’s acquisitions — that is, when prices had already risen — would have ended up losing money. Everyone except Trump: those assets appeared in his financial disclosure as income tied to company activity. He reported more than $520 million from cryptocurrency sales and another $250 million from the sale of company shares.

Profiting from his policies is controversial, but he is also accused of influence peddling. The Cato Institute, a conservative think tank, notes how Trump pardoned Changpeng Zhao, Binance’s co-founder, who had pleaded guilty to violating anti–money laundering laws. Binance was instrumental in developing WLF’s stablecoin. “The undertaking netted Mr. Trump hundreds of millions, part of $1 billion in crypto gains, while most token buyers lost money,” the think tank notes.

At the same time, Trump has courted industry leaders. Months after returning to the Oval Office, he hosted a dinner with more than 200 industry representatives. Soon after, he released a 166-page report supporting the sector and predicting favorable regulation. He recently met again at the White House with executives from Coinbase, Ripple and other crypto investment platforms, where he announced plans to push a legal reform favoring the industry, the Clarity Act. Despite presidential pressure, last week the U.S. Senate rejected the bill.

The Trump family would benefit from looser regulation. A detailed Reuters investigation into their digital businesses concludes that the president and his children have increased their net worth by at least $2.3 billion from their crypto projects since his return to the White House, all with little outlay of their own cash. In contrast, Reuters estimates other investors lost $2.3 billion. The losers are retail buyers of cryptocurrencies and shares linked to those assets, and those who invested indirectly through funds exposed to Trump’s crypto holdings.

Double paradox

The president’s staggering gains and the multimillion-dollar losses suffered by many investors reflect a double paradox. On one hand, they clash with the populist rhetoric Trump uses to present himself as a champion of ordinary people against the economic elites, even though much of the generated wealth ends up concentrated around him.

On the other hand, they call into question the fundamentals of cryptocurrencies, originally conceived as an alternative to established financial and political power, but which today also serving to swell the fortunes of some of the system’s most influential figures.

This antiestablishment rhetoric, marked by distrust of the state and institutions, fits the ideology of parts of the populist right and of authoritarian leaders who have co-opted the iconography of this universe in their political discourse. “They see the individual as the only legitimate actor against powers that always want to control you and take away your freedom,” Gerbaudo summarizes. Trump has been able to exploit that narrative by presenting himself as the sector’s savior from an oppressive regime. The balance of these two years contains a contradiction that is hard to ignore: what began as a rebellion against power ended up integrated into existing power structures and, above all, enriching the fortunes at the center of that power.

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