Thursday Mailbag: Dinners, memecoins and lobbyists

“The value of all Wares arise from their Use; things of no use, have no value.” — Nicholas Barbon (1690) Q: What did dinner with the president cost? The final TRUMP holder to qualify for dinner with the president held 4,196 tokens, which were worth about $60,000 at the cut-off. But that’s not the cost of the invite, because holders were free to sell as soon as the period or record ended. If they did, they would have taken about a 10% loss, making the real cost of dinner with the president (and 219 others) about $6,000. This is a bargain! For comparison, a Super PAC sold tickets in March to a “candlelight dinner” with the president for $1 million each — 166x more! Donors were also offered a one-on-one meeting with the president for $5 million. That, I think, seems roughly on par with the 25-person VIP meetup for TRUMP token holders, which cost at about $240,000 for those who sold immediately after qualifying. Many did sell, including the last VIP qualifier, whose wallet now shows a balance of zero TRUMP. Roughly 40 others also sold as soon as they had qualified — including several mature jokesters who reduced their holding to 69 tokens (the conversation at dinner will be riveting, I’m sure). There might be consequences for gaming the contest like that — I’m guessing the zero and near-zero holders will be seated further away from POTUS, at the very least. But the 220th holder appears to be a true believer: They doubled their TRUMP holdings after the contest ended. Might that earn them a second scoop of ice cream? Let’s hope they report back. Q: Are memecoins making a comeback? They’re less dead than I thought — forgotten pan flashes like Moo Deng are up as much as 600% over the past week or so. There were also 63,000 new Solana-based tokens created on Tuesday alone (nearly all of which presumably qualify as memecoins): I couldn’t name a single one, however — in fact, I can’t recall the last time I heard about a new memecoin launch. Memecoins don’t have nearly the mindshare they once did, and the list of memecoins that are up this week (Goat, Pnut, Fwog, Popcat...) feels as dated as a playlist of 1970s disco hits. That’s probably a good sign. With luck, none of the memecoins created yesterday will get traction — and with a little more luck, that will incentivize crypto investors and builders to reallocate their time and money toward projects that are useful to people. We’re not there yet — Blockworks Research data shows that memecoins still trade 14x more volume than “project tokens:” Q: Should memecoins be regulated? They’re collectibles, not securities, so I guess not. But the purpose of securities regulation is to encourage retail participation in stock markets by giving people the impression that the playing field is level. So, if the crypto industry wants retail to participate in crypto markets, it might have to self-regulate in some way that gives people the impression that the playing field is level for crypto investors, too. Memecoins give the opposite impression, as only insiders appear to be getting rich from them. That’s a problem because you only need to watch kids on a playground argue over the rules of tag or kickball to know that a game that doesn’t seem fair won’t last very long. Q: Would HYPE be 4x more valuable on the stock exchange? It was fun to hear David Balin, formerly the chief investment strategist at Citi, cite Hyperliquid as an example of how traditional investors might diversify their investment portfolios. In response to the host’s typical question about the intangible value of crypto, he responded, “It’s true that memecoins and NFTs and stuff don’t generate revenue but there’s a handful of others that are online that literally generate revenue every day and you can see it.” True! He does unfortunately get -1 point for repeatedly saying “online” when he means “onchain.” But I think that is good news, too — when investors who aren’t totally clear on the difference between online and onchain are interested in something as deep-cut as Hyperliquid is, we’re really making progress. “This is a company that, were it to be Robinhood or were it to be Coinbase, it would probably be worth 4x what its market cap is in the digital world.” 4x! I’d be curious to see the math on that, because Hyperliquid trades on about 17x revenue and Robinhood trades on...wait for it...17x revenue. Hyperliquid probably has much higher margins — it somehow returns all revenue to token holders. But Robinhood trades on 34x earnings, so even if Hyperliquid has 100% net margins (which is presumably impossible) it would only be 2x undervalued vs. Robinhood. On the other hand, the stock market values bitcoin held by Strategy (née MicroStrategy) at 2x what it’s otherwise worth and bitcoin promised to a SPAC (Cantor Equity Partners) at 3x what it’s otherwise worth. So maybe Balin’s right that the stock market would value Hyperliquid at 4x what the crypto market does, who knows. Q: Is TRUMP a memecoin? We can quantify this now. The TRUMP token has not given back all of its gains from before the dinner contest was announced, which implies that holders believe it will continue to have utility above whatever value it previously had as a memecoin. Specifically, the additional $700 million of market capitalization it’s retained might be seen as the present value of future TRUMP utility. TRUMP’s market cap is $2.6 billion, so I’d argue it’s now 75% memecoin and 25% utility token. If $700 million sounds like a lot, consider that Roger Ver paid a lobbyist $600,000 to try to get the president’s attention on his behalf; there’s a waiting list to pay $500,000 to get into Donald Trump Jr.’s new private club “Executive Branch” which promises access to lesser government officials; and Qatar has offered the president a $400 million airplane — presumably to stay in his good graces.