Did Trump make billions with his meme-coin?
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This BBC podcast is supported by ads outside the UK. Hello and thank you for downloading the More or Less podcast. We're the programme that looks at the numbers in the news and I'm Charlotte MacDonald. It's been a busy week for Donald Trump. The office of President of the United States. He was sworn in as the 47th President of the United States, signed a wallop of executive orders. The golden age of America begins right now. And launched his own currency. Well,

a currency of sorts. Yes, Donald Trump has released something called a meme coin and the headlines got pretty excited about it, with The Telegraph stating... But is this really true? And what is a meme coin anyway?

Let's start with the BBC's cyber correspondent Joe Tidy, who is the proud owner of some Melania coin, the First Lady's own venture into meme coin land. A meme coin is a bit of a joke cryptocurrency, really. People can create coins themselves, anyone can do it, and there are thousands of them.

Cryptocurrency is a digital form of currency created using encryption algorithms. Sexy, huh? Some, such as Bitcoin, are able to be used like regular currency in some places. Meme coins?

don't work quite like that. There are shops and online services where they'll trade Bitcoin for everything from coffees to houses in some countries. But with meme coins, there's no real purpose to them. They're just sort of fun and they're a way of making money, essentially. People can speculate on these coins and they go up and down in value quite wildly. The T's and C's for Trump's meme coin are totally explicit about this. They say it's...

Intended to function as an expression of support for and engagement with the ideals and beliefs embodied by the symbol Trump and the associated artwork. And they're definitely not... An investment opportunity, investment contract or security of any type. This might be the intention, you can be the judge, but they are definitely being traded as if they are a financial asset.

The basic concept for buying meme coins is to trade them in the hopes that someone, somewhere, will pay more for them than you. But this is all a risk, a speculation as the Victorians would call it. The value of any cryptocurrency is constantly in flux, and meme coins are especially volatile.

It's basically a bit like old-fashioned coin collecting. The new numismatists, if you will.

Each of these little Trump coins is unique, they cannot be replicated. However, instead of physical binders with meticulously ordered coins lovingly displayed, you get a virtual wallet and a

It's a little graphic of a coin with Trump's face on it. Although it turns out that they're a right faff to actually get hold of. It was a real process and it just reminded me that this isn't really for the kind of the faint-hearted Melania supporters or Trump supporters. These are people who are already in cryptocurrency who potentially are trying to make money. But how much money has this whole enterprise actually made Trump? Is it really $43 billion like the Telegraph said?

That's the claim, but it's a dubious claim at best. I'm Molly White. I am an independent writer and researcher of the cryptocurrency industry and the tech industry more broadly, and I write the Citation Needed newsletter. The calculations the newspapers use to get to the billions of dollar values are

are fairly simple. They rely on two basic things. First, the fact that a billion Trump coins would exist within the next three years. Most cryptocurrencies have a total cap of supply. So, for example, Bitcoin will never have more than 21 million bitcoins.

That's the total cap. And the same thing is true with the Trump meme coin, where they've only issued 200 million of them to date, but eventually they will issue up to 1 billion of these Trump tokens on sort of a schedule. Only a small proportion of these coins are available to the public. Most of them have been allocated to companies affiliated with Donald Trump.

These own 80% of the coins. Next thing, how much are they worth? Well, you can't buy anything with them. So they're only worth what people are willing to pay for them. Yeah, so the...

Price of any given cryptocurrency token is based on the going price on a cryptocurrency exchange, which is usually the price that these tokens most recently traded hands or the offer prices on these tokens. This price has been all over the place. It peaked at over $70 per coin over the weekend. At time of recording, it's sitting in the 30s.

The two numbers, the supply and the price, are how you get to a massive valuation. There's something called the fully diluted valuation of a token. And that is multiplying the token price by the total future possible number of tokens that could circulate.

So that, again, is how the prices of $53 billion are being achieved, because there could in the future be up to 1 billion Trump tokens circulating. And at a price of, say, $53, you multiply that by that billion and you get the fully diluted valuation. News outlets have just multiplied the Trump meme coin price by the theoretical number of all coins he could have a share of. That's

80% of 1 billion, so 800 million. Most of these coins do not exist on the market yet, and there is absolutely no guarantee that the existing Trump tokens will retain their value in a market that is famously floppy. Trump's businesses also have to be incredibly careful how they sell off their 80% share, as flooding the market could destroy the value completely.

There's also the issue that a lot of these coins were not bought with actual dollars. Instead, people use other cryptocurrency, such as one called Solana, to purchase them.

And so then you have this question of, OK, so is every Trump token actually worth X amount of Solana? And then is that amount of Solana actually worth the amount of dollars? And at very small numbers, it's fairly safe to assume that a major cryptocurrency like Solana could be cashed out for dollars to the extent that the price reflects. But once you get above large numbers, especially when you're talking about billions of U.S. dollars,

Those assumptions very quickly fall apart. So has Trump earned himself $43 billion? He has not.

The truth is, we don't really know if Trump has made money from this venture yet, or if he will in the future. Forbes magazine, who do the big list of billionaires, currently say his meme coin project adds zero dollars to his net worth. Trump and his companies might have sold some of their cut already for millions. They might sell more in the future for billions. We don't know. Whatever he makes, he somehow managed to use his popularity to create that money from basically mid-air.

Saying that, it does seem like someone has already made some serious money. According to Bubble Maps, a company that tracks the public crypto data, one minute after the Trump coins were released...

One anonymous account, known only as 6QSC2, bought millions of dollars worth of the meme coin, before selling most of them later for a massive profit. One estimate says they might have made more than $85 million in a couple of days. As for Joe, he's going to cash in quick and make sure his potentially newfound meme coin wealth will keep him as grounded as ever.

Oh, I won't. I will retire to an island somewhere and forget all of you. Uh-huh. Maybe hold booking that flight. Joe's token value has dropped from $30 to $8. Maybe enough for a packet of peanuts on the plane. Well, that's all we have time for this week. Thanks to Molly White and Joe Tidy. Do remember to keep your thoughts and comments coming in to moreorless at bbc.co.uk. Until next week, goodbye.

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You just get sucked in so gradually.

And it's done so skillfully that you don't realize. And it's like this, the secret that's there. I wanted to believe that, you know, that whatever they were doing, even if it seemed gross to me,

was for some spiritual reason that I couldn't yet understand. Revealing the hidden secrets of a global yoga network. I feel that I have no other choice. The only thing I can do is to speak about this and to put my reputation and everything else on the line. I want truth and justice.

And for other people to not be hurt, for things to be different in the future. To bring it into the light and almost alchemise some of that evil stuff that went on and take back the power. World of Secrets, Season 6, The Bad Guru. Listen wherever you get your podcasts.