The launch of President Donald Trump’s meme coin and its meteoric rise to tens of billions of dollars in valuation has generated astonishment unlike anything seen before.
What happened: The Official Trump (TRUMP) coin reached a fully diluted valuation of nearly $75 billion within two days of its launch, a feat that took several publicly listed corporations years to achieve.
Take, for instance, tech giant Amazon.com, Inc. AMZN. The Jeff Bezos-founded company may boast of a market capitalization of nearly $2.50 trillion today, but its growth in the nascent stages wasn't exactly exponential.
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Amazon had its initial public offering on May 15, 1997, trading at $18 per share. It had a market valuation of a little over $11 billion by 1998.
The company operated at a loss for years, partly due to the dot-com bubble crisis, and it wasn’t until 2003 that it earned a full-year profit. Despite this, its market worth fluctuated between $10 billion and $30 billion for the remainder of the decade.
The stock finally took off at the dawn of the new decade and hit a $75 billion valuation in Oct. 2010. This means that it took Amazon more than 13 years to reach a market worth what President Trump's memecoin did in two days.
Why It Matters: While these analogies indeed evoke astonishment, one should exercise caution when comparing enterprises founded on a business strategy to assets that lack use cases, at least so far.
Aside from being linked with the U.S. president, the TRUMP meme coin has no practical application. It’s only being utilized as a speculative investment to record quick profits.
The result—a highly volatile asset. Its fully diluted market capitalization, as mentioned earlier, has halved to $37 billion as of this writing.
On the other hand, Amazon has grown to become a trillion-dollar company, enabling Bezos to accumulate a multibillion-dollar fortune.
Price Action: At the time of writing, TRUMP was exchanging hands at $37.00, plunging 13.74% in the last 24 hours, according to CoinMarketCap.
Shares of Amazon closed 1.86% higher at $235.01 during Wednesday’s regular trading session.
Image via Flickr
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