FirstFT: Trump and crypto

Good morning. As executives prepare to gather at the White House today for a cryptocurrency summit, we look at Donald Trump’s controversial memecoin scheme. We’re also covering:

• A fresh push for peace in Ukraine

• The hidden dangers of family offices

• And Tim Harford pays tribute to economist Donald ‘Shoup Dogg’

Donald Trump’s crypto project made at least $350mn, according to Financial Times calculations, a windfall that is likely to fuel concerns over conflicts of interest arising from the launch of the $TRUMP token.

In addition to the $350mn earned through selling the token directly on the Solana blockchain — the digital ledger that underpins most memecoins — more money is likely to have been made from a smaller number of tokens that were distributed for sale on cryptocurrency exchanges such as Binance, experts say.

Trump has faced a fierce backlash since he and his wife Melania launched memecoins, tokens with no practical use whose value is entirely based on speculation, just days before his return to the White House.

The value of $TRUMP soared to $75 shortly after its launch before plunging to its current value of a little over $13 a coin. However, the FT analysis shows the first 100mn tokens were sold before the price reached $1.05. The stock of 831mn $TRUMP coins held by Trump-linked accounts has a current notional value of $10.8bn.

Trump, who has positioned himself as a pro-crypto president, will host many of the industry’s leading executives and investors at the White House later today. The meeting marks a dramatic change of fortunes for the industry which, under the Biden administration, had seen some of its leading protagonists jailed or fined.

On the eve of today’s meeting, Trump signed a long-awaited executive order creating a strategic Bitcoin reserve and an additional stockpile of other digital assets. But the government indicated it would not use taxpayer money to fund the reserve, prompting falls for Bitcoin and other digital currencies. Read more on how the FT calculated the earnings of Trump’s memecoin project.

Here’s what else we’re keeping tabs on today and over the weekend:

• Markets: The S&P 500 is on course for its worst week since September after falling another 1.8 per cent yesterday. The tech-heavy Nasdaq Composite fell 2.6 per cent.

• Central banks: Federal Reserve chair Jay Powell speaks at a monetary policy conference in New York. European Central Bank president Christine Lagarde gives the keynote speech at the ECB’s International Women’s Day conference in Frankfurt.

• Economic data: The US government publishes monthly employment data for February. Brazil and the EU issue fourth-quarter GDP estimates.

• Canada: On Sunday, the Liberal party chooses its successor to Justin Trudeau who will also become the country’s next prime minister.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Donald Trump’s administration has backtracked further from its threat to impose sweeping 25 per cent tariffs on Mexico and Canada, in a major climbdown from its aggressive trade agenda, capping a tumultuous week that has roiled markets and frayed diplomatic relations between Washington and its largest trading partners. More on the US president’s executive order.

• ‘It’s like a whipsaw’: Dizzying policy changes have sparked an equity market sell-off, concern from businesses and panic in foreign capitals.

2. Ukraine is to begin negotiations with the US next week in Saudi Arabia over ending the war set off by Russia’s 2022 invasion, after days of tension between Kyiv and Washington. Donald Trump’s special envoy, Steve Witkoff, said the meeting with Ukraine would seek to agree a framework for “a peace agreement and an initial ceasefire”.

3. SpaceX’s massive Starship rocket exploded eight minutes after launch in another setback for Elon Musk’s company as it seeks to build a vessel capable of reaching Mars. SpaceX said the vehicle experienced a “rapid unscheduled disassembly”. Stephen Morris and Rafe Uddin have more.

4. Walgreens Boots Alliance has struck a deal worth up to $23.7bn with private equity group Sycamore Partners that will bring the struggling pharmacy chain’s 97-year run as a public company to an end. Walgreens’ market value peaked at more than $100bn soon after the 2014 merger closed, but has since dwindled. Read more on what Sycamore plans to do with the business.

5. Parents having fewer children are buying more expensive baby food, according to the head of Nestlé’s nutrition business, as the world’s largest food company shifts its strategy to offset the impact of falling birth rates. The Swiss group said that smaller families had driven “premiumisation”.

Today’s big read

Private wealth management companies for the super-rich now manage trillions of dollars globally and are one of the fastest growing areas of finance. They are also one of the least under­stood — or reg­u­lated. Read more on the hidden dangers of family offices.

We’re also reading . . . 

• Mar-a-Lago accord: The idea of a new Plaza Accord to weaken the dollar is sparking endless gossip among financiers, writes Gillian Tett.

• Venezuela: Opposition leader María Corina Machado welcomed the Trump administration’s abrupt decision to stop Chevron drilling in her country.

• Syria’s new leader: Is Ahmed al-Sharaa a conquering hero with intentions of moderating or a brutal strongman with a flair for PR?

Chart of the day

Soaring property values in Dubai are underpinned by a robust economy which benefited from the city’s decision to open up to visitors during the pandemic while other hubs still restricted travel. The UAE also liberalised its visa system in 2022. But some question how long the meteoric price rises can continue.

Take a break from the news . . . 

Donald Shoup revolutionised the way urban planners thought about parking. How he did it should be an example to economists everywhere, writes Tim Harford. His genius was to take a problem that seemed boring and trivial and show that it was neither.

Source: Economy - ft.com