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Newsletter: No, Trump didn’t make $50 billion from his memecoin.
Newspapers’ estimates of the $TRUMP token’s fully diluted value fluctuated wildly from somewhere around $20 billion to around $70 billion, depending on which paper you read and when they published.
This variance perhaps should have been a sign to these reporters that the numbers aren’t real.
![When Donald Trump launched a memecoin days before his inauguration, newspapers were quick to try to grab headlines with huge numbers.
“The $TRUMP memecoin — a financial asset that didn’t exist on Friday afternoon — now accounts for about 89% of Donald Trump’s net worth,” wrote Axios, which dubbed him a “crypto billionaire”.1 “[T]he so-called fully diluted value of all the tokens as of Saturday at noon was $30 billion, a number achieved less than a day after the token went on the market,” wrote the New York Times.2 Newspapers’ estimates of fully diluted value fluctuated wildly from somewhere around $20 billion to around $70 billion, depending on which paper you read and when they published.](https://media.hachyderm.io/media_attachments/files/113/861/208/196/902/553/original/8fb20544d795c0d1.png "When Donald Trump launched a memecoin days before his inauguration, newspapers were quick to try to grab headlines with huge numbers.
“The $TRUMP memecoin — a financial asset that didn’t exist on Friday afternoon — now accounts for about 89% of Donald Trump’s net worth,” wrote Axios, which dubbed him a “crypto billionaire”.1 “[T]he so-called fully diluted value of all the tokens as of Saturday at noon was $30 billion, a number achieved less than a day after the token went on the market,” wrote the New York Times.2 Newspapers’ estimates of fully diluted value fluctuated wildly from somewhere around $20 billion to around $70 billion, depending on which paper you read and when they published.")
This is not to downplay the extent to which Trump is grifting his devotees and crypto traders looking to make a buck on memecoin speculation. But it is important that we accurately report on his cons and don’t contribute to misleading crypto hype for the sake of large numbers.
To understand crypto “valuations”, take the example of MollyCoin. If I conjure a billion MOLLY tokens out of thin air and sell one for $1, I’ve just created a “billion dollar” cryptocurrency.
The Trump memecoin saga is a perfect example of how news outlets breathlessly reporting astronomical “fully diluted valuations” without proper context or skepticism helps to legitimize yet another crypto scheme.
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@molly0xfff thanks for having an open RSS feed and a one time donation option.
@molly0xfff Understanding and not using synthetic shock headlines,? Come on, that just wouldn't be mainstream US infotainment, I mean journalism.
@molly0xfff I read the original Bitcoin paper back in CS grad school and thought it was a fascinating bit of math. Years later, it hit my radar through general news coverage, and I've remained pretty uninformed, albeit skeptical, since then (if it quacks like a scam...).
Citation Needed has been just the right place for catching up on a decade of crypto at a time when it seems to be getting more and more popular buy-in. Thank you so much for all of your hard work while I was not paying attention.
@molly0xfff LOL now I understand how valuation works, great example!
@molly0xfff the entire crypto system was created to pay for illegal activity on the dark web until rich ppl saw an opportunity to get richer....now it's just the next scam.
As if this isn't a way to divert verifiable but untraceable bribe money to Trump.
@molly0xfff the weird thing about it:
as soon as you can find someone who thinks, the Mollycoin might be worth 10% more next week, you're in business.
Hope and more so greed fuel the system
@molly0xfff when I read the image posted the meaning is slightly different. In your example you sell a coin for $1 versus in the attached picture it says there is at least one buyer who wants to pay a $1 for your coin.
If you sell it and there are no future buyers does your valuation drop to zero?
@scerruti In the real world yes the valuation drops to zero. In fact it was always zero. In cryptocoin land the valuation is based on the last price regardless of demand. This keeps the hype up for all coins.
@molly0xfff i love how when it comes down to it its just the bit in the action movie where the baddie prints money with his own face on it. people are selling us M Bison bucks.
@molly0xfff I can see why this stuff appeals to people who believe life can be like the movies and they personally can become rich overnight. The same kind of people who vote for those politicians who claim there are easy answers to difficult problems.
It's like a desperate need to believe in magic.
@molly0xfff Where to I trade $MOLLY ?
@molly0xfff
My concern is that Putin could buy a chunk of TrumpCoin and threaten to sell it low if he doesn’t do what Putin wants.
@taatm @molly0xfff if it makes you feel better the vast majority of TRUMP token trading is happening on Chinese crypto exchanges that are banned from doing business in the United States
(that probably didn't make you feel much better)
@molly0xfff @timbray remember that time 37Signals sold 0.000001% of the company for $1, for a $100B valuation?
If I recall correctly, they got in trouble with the SEC about that 
@molly0xfff I have a few molly in my toolbox myself. They're very useful! But they're not white, instead they're silver colored! Much more value!
@molly0xfff (ND readers who need the cue: don't worry, nobody actually believes this, it's a joke) Hey now aren't you going to have to pay some taxes on that billion dollar mollycoin windfall?
but if memecoins and NFTs are just information
and what you just wrote was just information
and what you just wrote told ALL of us how to achieve billion dollar valuations
and there's ~8b humans
if all you take is a 10% monetization slice,
clearly you just established ~8e17 dollars in economic value
so once you pay your taxes, we should be good for basic income for a few generations
that's how money and crypto work right?
@molly0xfff you sunavabitch I'm in
@molly0xfff All valuations.
eg Musk doesn't have a bajillion dollars sitting in a big vault, he owns things that, based on their most recent resale price, are considered to be worth a bajillion dollars, despite the fact that if he actually tried to sell them in any quantity, supply/demand would kick in.
This is why some were theorizing that the whole X purchase fiasco was an attempt to hide him selling off Tesla stock.
Yes, this is a house of cards.
@molly0xfff it is very sad to see people so blatantly getting taken advantage of.
@molly0xfff aha, this explains it, because there's absolutely no way the token has $20 billion backing it — even if all 77 million people who voted for trump bought it at 53$ it'd only be $4.08 billion
@molly0xfff this is an excellent drill down in the topic of valuing of cryptocurrencies.
@molly0xfff What a huge media-hyped scam this is! What will happen when these new snowflake-coins will crash in a couple of months? The head of the USA is the head of one of the world's biggest crypto-scams... what a mess! ;)
@molly0xfff “ This is not to downplay the extent to which Trump is grifting his devotees and those crypto traders looking to make a buck on memecoin speculation. But it is important that we accurately report on his cons and do not contribute to misleading crypto hype for the sake of large numbers.”
This sounds like now commonplace corporate bookkeeping: to count years of future sales, rents, and capital gains as current assets and then bury it deeply enough that no one will notice what you did.
@molly0xfff note that the "market cap" of some companies is roughly as fictional (esp when a significant amount is held by a single person, e.g. Tesla and SpaceX).
@billseitz@toolsforthought.social @molly0xfff@hachyderm.io This is a point I've been making for years, Forbes and others lazily go for the big numbers rather than calculating the real net worth assuming someone actually sold their assets. It's a tougher calculation given that dumping that much stock will drive the price down, but if you don't account for that it's fictional wealth.
Thanks for this, it’s a simple economic concept that crypto handwaving has somehow managed to erase from people’s heads: I can knit a pair of wool socks and sell them for a $10 profit in my city of one million people, but if I could magically replicate the sock a billions times, I don’t have $10 billion dollars; instead I have a mountain of socks, a storage problem, and a saturated market… soon I’ll be paying people to take socks off my hands.
@DavidM_yeg
That's because you didn't partner with Logan Paul to create an exciting sock community with really exciting things coming, guys!
Absolutely! I can get Edmontonians super excited about about wool socks, and he’ll convince every person they just can’t survive without a thousand socks: socks in their drawer, and under the bed, and in the closet, and in the basement, not to mention the obligatory 100 socks in the trunk of the car!
/s
@DavidM_yeg
I'm hearing a lot of things about socks - people are talking, a lot of excitement around the whole sock space. You'd better get in on this sock thing now before it goes to the moon!
Why does Coffeezilla want to talk to me about socks now?
@molly0xfff This was so fascinating and educational that I inflicted a summary on my daughter, who grudgingly admitted it really *was* interesting.
@molly0xfff oh no, journalists have flawed maths skills and suffer from ignorance? Tell me it is not true, please!
@molly0xfff can we the start calling out the other guy too? Like 90+% of his supposed net worth is the crypto-like valuation of a stock that’s maybe worth 20 to 80 Billion if it would be traded like a car company. Is the difference is that he can take out loans against the stock, he definitely can’t cash it all in at will.
Not a details person, something.. something about the announcement of Molly Coin. I would buy those, went and looked and all I can find are stickers. 