The Official Trump cryptocurrency has seen a big pullback over the last week of trading. The token was launched late on Jan. 17 and rocketed higher in its first day on the market, but it’s subsequently seen a significant valuation decline. The recently launched meme coin’s token price fell 50% over the previous week of trading, as of 10:30 a.m. ET Sunday.
Official Trump’s valuation is falling in conjunction with negative media coverage and reactions from some cryptocurrency investors and post-inauguration trading momentum. While the token is still up more than 360% from its debut, momentum has turned bearish following its post-launch surge.
Official Trump slumps on media coverage and post-inauguration trades
Official Trump quickly became one of the most controversial tokens in the cryptocurrency world when President Trump unveiled the token just days before returning to office. It has continued to attract skeptical media coverage, with some crypto websites and mainstream outlets publishing articles raising concerns about potential conflicts of interest involving the president and the possibility that Official Trump’s large token holders could move to dump their tokens all at once.
CIC Digital LLC and Fight Fight Fight LLC are companies connected to Trump and own 80% of the Official Trump token supply. On the other hand, there are restrictions in place that prevent the large stakeholders from selling their supply within the next three years.
In addition to investor concerns and negative media coverage, Official Trump is probably seeing sell-offs now that the explosive gains that some hoped for following Trump’s inauguration have not materialized. With Official Trump failing to rally immediately after his return to office, some investors who had been seeking big short-term gains sold out of the token and helped to push its price lower.
What comes next for Official Trump?
As a meme coin, Official Trump is an almost purely speculative asset that has very little in the way of fundamentals. The token’s connection to President Trump is central to its performance outlook, but it’s not clear to what extent the new president’s actions and personal brand strength will affect the cryptocurrency’s valuation.
Given that this is a recently launched token that has the unprecedented distinction of being launched and supported by a U.S. president, there’s a lot of uncharted territory here. While it’s possible that the token could see substantial gains thanks to its Trump connection, the cryptocurrency looks risky and will probably continue to see volatile pricing moves.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
