Trump’s crypto windfall showcases his ability to turn loyalty into power

Like many people outside the United States, I admire much of what it represents: open debate, strong institutions, energetic politics and the belief that public power should be restrained by rules. That is why watching the US today is so extraordinary.

Consider US President Donald Trump’s meme coin. Nearly a million accounts that bought the $TRUMP coin have lost money, according to a report in The New York Times based on analysis of blockchain transactions. Their collective losses have been estimated at US$3.8 billion.

Trump, meanwhile, has reported enormous income of more than US$1.4 billion from cryptocurrency ventures associated with him and his family. In a social media post, economist Paul Krugman called the buyers of coins “suckers” of a pump-and-dump scheme in which naive investors piled into a worthless asset while insiders prospered.

This might not fully explain what happened. Trump demands unquestioning loyalty and has an intensely loyal political following. Is it really surprising that some of the people who voted for him would buy something carrying his name?

Think of the memecoin less as a conventional investment and more as a strange combination of political donation, memento and lottery ticket. People buy hats and T-shirts bearing the name of a politician they support. They donate to campaigns despite knowing they are unlikely to receive a financial return. Fans pay extraordinary prices for objects associated with their idols.

The Trump coin combines all of these impulses. You buy a digital piece of Trump and feel you are part of his world. Many small buyers do not see themselves as victims. It might even be exciting to purchase something so new.