🔮 What’s Going On With Trump and Crypto?
Why odds for Trump to drop a token crashed at the project’s big launch event
On September 12, a video posted to Donald Trump’s X account announced the announcement: World Liberty Financial, a Trump-blessed decentralized finance (Defi) project would be launching soon. Trump:
“We’re embracing the future with crypto and leaving the slow and outdated banks behind.”
On Polymarket, odds for Trump to release a token before the November 4 election soared from 38% to over 85%. Don Jr. and Eric Trump’s social media feeds were sounding increasingly crypto-pilled and Trump had just released his fourth collection of NFT trading cards a few days earlier.
On September 16, despite a second assassination near-miss the day before, Trump appeared on an X Spaces with his three sons along with members of the crypto project’s team and Farokh, a crypto podcaster.
Ninety minutes into the event the speakers got to the question Polymarket users were waiting for: when token? Asked about the token launch, WLF co-founder Zachary Folkman made a comment that tanked the Polymarket odds for Trump to drop a token from 75% to the low 20s:
“When we get clarity on the regulations, we'll be able to do a free Twitter spaces. But you know, hopefully November 4 we get that opportunity.”
For many Polymarket traders, this comment was confirmation that the token would be delayed until after the election when a second Trump administration might bring a warmer regulatory climate for crypto.
Most mainstream media accounts frame the WLF project as a cash-grab. And even pro-Trump crypto investors like Nic Carter have called the project “a huge mistake.”
So what’s going on? Is the Trump crypto project, as some have suggested, an elaborate fundraising scheme? An election-year strategy to win crypto voters? Or an actual new understanding of crypto’s value proposition? And is there any hope for the Trump token launch (🔮30% chance) before the election?
A Brief History of Trumpworld & Crypto
To answer these questions, it’s helpful to look at a timeline of Trump and Trump-adjacent crypto events.
June 2021: As recently as June 2021, Trump called Bitcoin a “scam against the dollar.”
December 2022: Trump launches first NFT collection of 45,000 digital trading cards. He would later credit the success of these launches for his change of heart towards crypto. Disclosures reveal that Trump continues to hold $1-5m of Ether generated by these sales.
January 2024: MAGA memecoin launches and rises to over $775m market cap by May. This coin bears Trump’s name and image, but has no known connection to the Trump family.
March 2024: Memecoin DJT launches and reaches $159m market cap at its peak, with reports that Barron Trump was involved in its launch.
July 27, 2024: Trump speaks at the Bitcoin 2024 conference where he pledges to not sell the USA’s confiscated Bitcoin holdings, and fire anti-crypto SEC chair Gary Gensler “on day one.”
August 6, 2024: Eric Trump tweets, “I have truly fallen in love with Crypto / DeFi. Stay tuned for a big announcement…”
September 11, 2024: “Will Trump launch a coin before the election?” market launches on Polymarket, and reaches nearly $3m in trading volume.
September 12, 2024: Trump announces launch of World Liberty Financial (WLF) on X. Polymarket betting on Trump coin release soars to 85%.
September 16, 2024: Trump appears at WLF launch event, but odds for token by election crash to ~20% as team appears to delay the token launch.
September 18, 2024: Trump appears at a campaign event in New York where he is recorded making his first Bitcoin transaction.
What sticks out here?
Trump has likely made in the low seven figures through his NFT projects, but outsiders have likely made far more by cashing in on Trump’s brand.
The most successful Trump coin, MAGA, is outside the Trump family orbit and hit a peak of almost $1b.
With multiple major events over the last year, Trump’s embrace of crypto seems more like a real policy shift than an election year pander.
A recent profile by Olivia Nuzzi shows how Trump’s embrace of crypto is part of a deeper election strategy to appeal to anti-establishment communities:
What We Know about World Liberty Financial
Unlike memecoins which are tradable tokens representing an idea, or NFTs which are a set of collectibles akin to digital baseball cards, World Liberty Financial is planned as a decentralized finance (DeFi) blockchain-based application that allows users to engage in financial transactions, without an intermediary.
WLF did not respond to a request for comment from The Oracle. The following is reconstructed from media accounts and a transcript of the event with Trump.
WLF seems likely to be an interface to the borrow/lend protocol Aave where users deposit one type of crypto asset (like Ethereum) to earn interest and borrow other tokens (for example dollar-pegged stablecoins) against the crypto collateral they have deposited.
The project has Telegram and X accounts, but no public website or app. Shortly after the X Space with Trump began, the social media accounts of two Trump family members were hacked to post links to fake versions of a WLF website.
The project will have a non-transferrable governance token, WLFI, that allows holders to vote on proposals affecting the protocol, such as what assets to support or blockchains on which to deploy. The token purportedly will be sold only to US accredited investors, and not offered to the general public.
During the Spaces event, the founders stated that tokens will be allocated as follows: 63% sold to the public (with the caveat above), 17% user rewards, 20% team compensation. This contradicts an earlier Coindesk report that 70% of the token supply would be earmarked for insiders.
So Why the Delay?
While bad press for WLF in the New York Times is hardly shocking, the project has also drawn fire from crypto insiders.
Before the launch event with Trump, Nic Carter, a partner at crypto-focused VC fund Castle Island Ventures, and a Trump-supporter personally, told Politico that the project was:
“A huge mistake...It looks like Trump’s inner circle is just cashing in on his recent embrace of crypto in a kind of naive way, and frankly it looks like they’re burning a lot of the good will that’s been built with the industry so far.”
Carter pointed to pressure from the SEC that could arrive even before the election, as well as the reputational risks should the project be hacked (which was reinforced by the Trump family hack during the space).
It’s clear that the team is feeling some of this heat. On the Spaces event, when discussion moved to the token, WLF co-founder Folkman abruptly switched from crypto buzzwords to stiff legalese and joked his attorneys were “staring daggers” at him across the room.
But there may be hope yet for Polymarket users hoping the coin launches soon. Nic Carter, speaking to The Oracle for this piece, did not see any signs that industry criticism or legal risks were causing the team to delay their launch.
My understanding is that they would have to launch pre-election to have Trump be meaningfully involved (because he wouldn't be able to post-election if he won due to conflict of interest rules). But perhaps they’re rethinking that in response to the criticism. Currently no I don’t feel like my critiques have been heard and it seems like they’re unwisely plowing ahead with this anyway.
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