Matthew Tuttle, CEO of Tuttle Capital Management, recently remarked, “Trump was an amazing catalyst for all of the Trump names.” However, he cautioned that such enthusiasm often leads to a speculative bubble, stating, “all this stuff becomes a bubble looking for a pin, and eventually, the bubble always finds the pin.” This observation highlights the recent downturn in U.S. financial markets, which has disrupted the record highs that former President Trump frequently celebrated.
Over the last two years, investors exhibited a remarkable willingness to invest heavily in a variety of assets, ranging from technology firms to cryptocurrency, and even memestocks like Trump Media and GameStop. However, this trend has reversed amid a volatile economic landscape, prompting investors to offload assets regardless of their affiliations. For instance, the so-called Magnificent Seven—a group of dominant tech stocks including Nvidia, Meta, and Tesla—has experienced a 6% decline this year and has recently entered correction territory, typically defined as a drop of 10% or more.
Bitcoin, recognized as the most valuable crypto token, has suffered a staggering 23% decrease since reaching its all-time high of over $109,000 on Inauguration Day. Many seasoned Wall Street analysts are now cautioning that this selloff might just be the beginning. Julian Klymochko, who leads the Calgary-based investment firm Accelerate Financial Technologies, stated, “We’re past due for a market-clearing event. There’s a significant amount of excess froth that needs to be worked through.”
Despite attempts to gather insights, representatives from Trump Media and the Trump Organization have not responded to requests for comments. Recently, Eric Trump, the former president’s son, took to social media platform X to encourage investors with the message “Buy the dips!!!” in relation to the recent cryptocurrency selloff.
While the turbulence in the markets could signal a necessary recalibration, easing fears among investors was seen when the Federal Reserve's preferred inflation measurement came in as anticipated. This resulted in a temporary stock rally, with experts like Robert Ruggirello, founder of Brave Eagle Wealth Management, describing the recent market declines as “garden variety volatility.” He pointed out that February is traditionally a turbulent month for stocks, especially following January gains. Ruggirello emphasized, “We do not believe that the recent market declines are a sign of some sort of deeper bear market on the horizon.”
According to Forbes, Donald Trump’s net worth is estimated at $5.1 billion, primarily derived from his real estate ventures and substantial stake in Trump Media. However, full transparency regarding his financial empire is limited due to the privately held nature of the Trump Organization. Notably, Trump’s valuation in Trump Media has plummeted from $4.6 billion at his inauguration to $2.8 billion today, attributed to ongoing share price declines.
Trump Media, which is majority-owned by Trump, has seen significant fluctuations since its public debut last year, struggling to regain its footing after peaking at $79.38 last March; shares closed at $24.10 last Friday.
Volatility is a well-known characteristic of memecoins, a fact acknowledged even by Trump’s own Wall Street regulators. The decline in tokens like $TRUMP and $MELANIA has created waves among traders, with data from crypto analytics firm Chainalysis revealing that over 885,000 crypto wallets have incurred losses trading $TRUMP, while 301,000 have lost money on $MELANIA. The cumulative losses from these wallets have reached nearly $2.5 billion.
Conversely, approximately 1.2 million wallets have profited from these tokens, with their total gains exceeding $8 billion. Additionally, the Trump family and its partners reportedly earned around $350 million through fees generated from trading these memecoins and selling $TRUMP tokens.
For Tuttle, whose firm is planning to launch a fund aimed at doubling returns on Trump Media shares, the current selloff represents a shift in the investing landscape. Individual investors, who previously played a minor role in the market, have become a significant force since the onset of the COVID-19 pandemic. Tuttle noted, “They get juiced about stuff and they run things up and then they get their butt kicked — and then they do it again.” He pointed out that names associated with Trump and other retail favorites surged dramatically post-election, but ultimately, “All of this stuff just got too ahead of itself.”
