Cryptocurrencies associated with Donald Trump are in a free fall, resulting in billions of dollars in losses. Trump Coin, which was launched before his inauguration, has tumbled from nearly $50 to $7.
Its market capitalization has plunged to $1.5 billion from a record high of $9 billion. Also, its daily volume has plunged from over $30 billion shortly after its launch to $302 million today.
World Liberty Finance (WLFI) token price has also plunged from $0.3200 in September to $0.1827. This plunge has also led to a major crash as the market capitalization has dropped from over $7 billion to $4.50 billion today.
Why Trump Coin and WLFI Prices Have Plunged
Cryptocurrencies associated with Donald Trump and his family have consistently surged shortly after their launch, only to plunge shortly after that.
The same has happened in the stock market, where the Trump Media stock price has plunged by over 40% this year. The recently launched American Bitcoin stock has also plunged and is hovering near its all-time low. American Bitcoin is associated with Trump’s children, Eric and Donald.
There are several reasons why the Trump Coin and WLFI prices have plummeted after their launch, despite the Bitcoin price surging to a record high this week.
One major reason is that these tokens are highly skewed towards Donald Trump and his entities. He largely controls over 80% of the Trump meme coin and WLFI tokens. Crypto investors don’t appreciate it when a single entity holds most of the tokens and takes profits.
Another reason is that these two tokens are highly inflationary. There are now 199 million TRUMP coins in circulation against a maximum supply of 1 billion tokens. Data shows that tokens worth over $5 million are unlocked a day.
Similarly, there are now 24.6 billion WLFI tokens in circulation against a maximum supply of 100 billion tokens. Millions of tokens will begin to come into the market.
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Whales Have Been Dumping Trump Coins
Meanwhile, on-chain data shows that whale investors have been selling the TRUMP and WLFI tokens this year.
According to Nansen, whale investors now hold 4.24 million TRUMP tokens, down from 5.8 million in July this year. The supply of the tokens on exchanges has jumped to 129 million from 121 million in July.
The opposite is happening with the WLFI tokens as whale investors now hold 20.24 million tokens, up from 13 million in September.
Also, smart money investors now hold over 860 million tokens, while the supply on exchanges has dropped. This could be a sign that WLFI is a better Trump coin to buy on the dip, given its role in the stablecoin industry.
Looking ahead, there is a likelihood that the Trump tokens, TRUMP and WLFI, will remain under pressure as Donald Trump’s influence wanes, especially in next year’s midterm election, where Republicans is expected to likely lose.
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