Donald Trump’s superhero trading cards timed the market all wrong
Donald Trump’s entry into the NFT world came at the worst possible moment.
The former president’s hyped “major announcement” turned out to be a set of digital trading cards for $99 a pop, drawing widespread derision from late-night hosts and even some Trump loyalists like Michael Flynn and Steve Bannon.
But the worse news for Trump is that by almost any measure, the NFT bubble has burst.
Non-fungible tokens are digital art and collectibles that are typically purchased with digital currencies. NFT art and collectibles have increased in popularity and value since 2020. Digital cartoon monkeys and other NFT imagers became ubiquitous as celebrities broadcast them on air and on social media.
But the heyday seems to be over.
According to CryptoSlam, total NFT volume was down 89% last month from its peak in January. According to a Dune Analytics report, trading volume in the OpenSea NFT market has reached its lowest level since June 2021. A collector can now purchase a Bored Ape Yacht Club NFT – the most famous collectible in space – for a paltry $80,466, an 81% drop from its peak value.
The value of NFTs has decreased during the so-called crypto winter, which has been caused by a decrease in interest and general chaos in the crypto markets. The dramatic fall of major cryptocurrency exchange FTX (and its founder Sam Benkman-Fried) has marked the end of a tumultuous year in the space, with the entire crypto market cap down more than 63%, according to Coinmarketcap.
Crypto winter shows few signs of thawing as prices hit record lows and lawmakers and Congress are now considering cryptocurrencies.
It should be noted, however, that despite the bad timing, Trump’s NFT portfolio has been ranked in the OpenSea NFT market and has raised over $1.4 million since its launch. On the Trump Digital Trading Cards website, the Trump Collection claims to be “sold out” and the floor price for one card has risen to $177.99, according to analytics site CoinGecko.
It is not clear how much Trump himself will take from these profits. The Trump Card Collection site contains a disclosure that says the Trump Collection is “not owned, managed, or controlled” by Trump or his companies, and instead is licensed to his likeness, “NFT INT LLC.” The LLC does not have a website and lists its address in a strip mall in Park City, Utah, next to an Asian restaurant and vape shop.
Validators of popular cryptocurrencies are currently under special scrutiny.
A class-action lawsuit was filed earlier this month against celebrities including Jimmy Fallon, Justin Bieber and Serena Williams, accusing them of improperly promoting The Bored Ape Yacht Club NFT series. “Celebrity cryptocurrency advertising is fraught with problems,” the complaint states.
Tom Brady, Gisele Bundchen, and Steph Curry were also recently sued for promoting FTX, and in October, Kim Kardashian was fined $1.26 million by the Securities and Exchange Commission for “illegal promotion” of EthereumMax tokens.
Trump’s 11th-hour entry into NFTs represents another late-stage attempt to jump on the market trend: special purpose purchase companies (SPACs), which allow companies to go public without the regulatory burdens that come with a traditional initial public offering. SPACs boomed in 2020 with celebrity and investor presence, but rising interest rates and a turbulent stock market have led to a dramatic drop in SPAC value.
A SPAC called Digital World Acquisition Corp was launched in October 2021, months after the SPAC boom peaked, and was trying to merge with Trump’s social media company, which owns Truth Social. Trump’s entry into the SPAC world came after the boom.
“When Donald launched his SPAC in October 2021, the writing on the SPAC bubble was already in blood on the wall,” said Ben Eifert, a venture capitalist at QVR Advisors. “He bought into an apparent collapse.”