These projects were all helped by policies and regulatory changes that Trump promoted, led by legislation that aimed to bring crypto stablecoins, tied to the value of the dollar, into the mainstream.
But the signs of trouble have been mounting over time. The memecoins that were launched right before the inauguration, with lots of promotional muscle from Trump himself, have steadily lost steam over time, with just occasional moments of relief, like the rally in April after the president offered to join some of the biggest holders of the coin for dinner.
Joel Li, the chief executive of an online marketplace for electric vehicles, bought the memecoin so he could attend the dinner, but sold out soon after. He noticed things getting particularly bad after Trump launched a new salvo of tariffs against China in October.
“People started to realize, this might not be what they thought,” Li said.
Michael Terpin, a long-time crypto investor, said that the tariff moves have served as a cold reminder: “Trump giveth and Trump taketh away.”
The problems, though, have gone beyond the vagaries of the broader markets. American Bitcoin has had to deal with a report that the mining machines it uses, from a Chinese manufacturer, have been investigated as a risk to US national security. Meanwhile, Alt5 Sigma, a public company that set out to buy one of the tokens issued by World Liberty Financial, has faced an exodus of executives after announcing that one of its subsidiaries had faced a criminal probe in Rwanda.
Alt5 Sigma did not respond to requests for comment on the recent developments.
The downdraft since October has taken out more than $1 billion of the wealth that the Trumps generated through their crypto ventures and other businesses. But they are still sitting on significant profits, according to the Bloomberg Billionaires Index. It is retail investors who bought into assets when they were flying near their peaks that are nursing the most painful losses.
Kevin Hu, a 22-year-old student in Vancouver, had positioned for a continued rally, but instead saw his portfolio of digital tokens drop by as much as 40% by mid-November.
“You’d think with the president being so pro-crypto, it would create a floor,” he said. “But the market didn’t respond that way. And the stuff around the memecoins, it just turned a lot of people off.”
