How I shorted $TRUMP coin (and got to have dinner with the President)

By announcing a contest last month, Donald Trump went beyond the bounds of financial and governmental ethics. The winner would receive an invitation to a private dinner with the president if they purchased and held the most $TRUMP meme coin for a full month. Attendees reportedly spent close to $394 million on $TRUMP to earn the privilege at the dinner, which was held on Thursday at the Trump National Golf Course in Virginia.

The Guardian examined the winners’ wallets and found that more than half of them lost money as a result of entering this competition. But only if you’re looking at the wallets that are visible on the leaderboard of the contest website. Other places were where the real money was being made.

“I’ll wager that 10% of those attending the dinner are doing this.”.

I spoke with a passionate cryptocurrency trader who discovered a way to win the competition without losing any money: purchase enough $TRUMP to place on the leaderboard, and then, in a different wallet on a different exchange, purchase $TRUMP perpetual futures that would be profitable if (or, as he perceived it, when) the value of $TRUMP fell. He did The Big Short, but he used Donald Trump’s meme coin instead. Prior to the contest’s conclusion, he informed me that ten percent of dinner participants were engaging in this behavior. Everyone is aware that the price of $TRUMP will eventually decline as more supply is dumped on retail and goes online in the future. “.”.

According to him, “most people I spoke with, especially the crypto traders and folks who are very close to the crypto ecosystem, are like, ‘Yeah, I dumped this,'” when I spoke with him again after the dinner. The coin has already been sold. “.”.

He continued by saying, “Many people put on the same hedge trade as I did, because they didn’t want to take a risk on the coin.”.

I am unable to disclose his name, ranking on the leaderboard, spending amount, or the dates of particular trades he made. I can say that he did this to make people laugh. However, he informed me that it is worthwhile to take a chance when the $TRUMP dinner contest has such a pronounced and evident set of financial incentives.

Was it worthwhile? “I was pretty much flat,” he said. “I thought the shorting I did was okay, but I originally wanted to make some money.” He did, however, receive a complimentary dinner as a result.

This interview has been clarified through editing.

Let’s go right back to the beginning. Why did you decide to enter this?

People only want things to gamble on, so I believe meme coins have a lot of longevity. When the Trump token was introduced in January, just before the inauguration, it was intriguing because it essentially functioned as a black hole, draining funds from every other token in the ecosystem. This explains why, right after it was dropped, the Trump token surged to an absurd amount. The launch of this competition made it abundantly evident to me that there would be a great deal of grift in this area and that the presidential family was only interested in enriching themselves.

There was obviously going to be a great deal of grift in this area.

Nevertheless, I have been interested in the Trump token and believe that I have been structurally bearish because the Trump family and its associates currently control a large portion of its supply. Just a short while remains until the supply is unlocked. In the cryptocurrency world, this is referred to as “dumping” when that supply unlocks; they simply dump it onto retail to obtain their exit liquidity. Thus, that’s one way the Trump family can profit. The other method is that the family obviously pays the trading fees whenever any trades take place.

I’m confident that the Trump token will decline. The price will be significantly less than it is now if you put a gun to my head and ask me what it will cost in two years.

I thought, “Okay, this is obviously a way for the affiliates and the Trump family to find a way to drive up the price temporarily,” when the contest first started. And from experience in this field, it’s evident that these occurrences only raise prices temporarily before consumers lose interest. It will drop unless you feed it something else.

Everyone anticipates a dump of the token.

Around the time the first tranche of Trump tokens was scheduled to unlock, which was 90 days after the token’s January launch, they started the contest. The entire competition was therefore positioned at a suitable point, when it was thought that the supply would be unlocked. Everybody anticipates that the token will dump. However, they later decided on Twitter to postpone the unlock for an additional ninety days. However, the price will drop significantly once the unlock occurs and they begin dumping.

This contest was therefore intriguing. I said, “All right, so I think I can make a trade here without really risking anything, and I think it will be interesting to meet new people at this dinner and see if anyone else is interested.”. There appear to be many crypto whales and people from other countries flying in to attend the dinner. One of the people I follow has stated in his Telegram that he is among the major holders. Over the past few days, he has discussed his preparations for this dinner.

So, explain to me how you raised the money to purchase the Trump coin. Did you spend any of your own money?

My own money is used. I only use my own money for all of my cryptocurrency trading. Through a centralized exchange, Coinbase is where I do some of my trading. Furthermore, I use self-custody wallets to conduct the remainder of my trading on chain. Owning $TRUMP tokens in a self-custody wallet is the only way to be in the top 220 when this opportunity arises. You can purchase the $TRUMP token on some exchanges, such as Coinbase, but it won’t be eligible for this contest.

Using a decentralized exchange, I purchased the $TRUMP token after transferring stablecoins like USDC to my Solana wallet.

You must register your wallet before you can be included in the ranking system, which is how the contest operates. I had to adjust my size a bit more to make sure I could catch up to those who had registered a few days earlier because I regrettably did that a few days late. That’s a subtlety, though.

Describe how to short the $TRUMP coin on a secondary market. How can someone do that, for example? I am a moron who only watches The Big Short to understand shorting markets.

We don’t need to go into the specifics here, but the basic idea behind shorting is to hope that the price will decline. The mechanism of shorting here is a little different from shorting stocks. You can short [crypto] in two different ways. A centralized exchange that essentially provides shorting services is one way. And by “shorting services,” I mean that these exchanges provide a “perpetual future.”. Bybits, Binance, and some of the larger exchanges outside of the US are the most common examples of exchanges that provide this. When it comes to providing derivative products that go beyond simply purchasing tokens, Coinbase lags far behind.

In addition to Coinbase, I was unable to short through an exchange like Binance due to numerous restrictions on who is permitted to use Binance. Binance has extremely stringent VPN regulations, and I’m in the US. I can’t simply create a Binance account and go short.

For me, shorting on a decentralized exchange was the only practical option.

For me, the only practical option was to short a decentralized exchange, which has gained a lot of traction in the past year or so. It is comparable to shorting on Binance, but it can be done on a chain. One well-known decentralized exchange that I use is called Hyper Liquid. Additionally, they provide derivative products on this exchange that essentially track the movement of various tokens. Therefore, you can start a short position by using the $TRUMP perpetual futures that they effectively offer. That’s about the high level, but if you want, I’m happy to go into the specifics.

Yes, please, do provide me with these specifics.

Basically, that’s how the short position is set up. There are a few things to consider conceptually. The first is that I need to invest more money in a different wallet in order to short $TRUMP because I’m doing so in a different wallet that is totally unrelated to it. It’s not as if I can short the same investment pool and use my $TRUMP tokens as collateral.

Additionally, shorting and perpetual futures generally operate by requiring you to put up a certain margin. To keep things simple, let’s say I decide to short the $TRUMP token after investing $100,000 in margin. Since I’m betting on the token’s decline, I’ll be hurt if the price of $TRUMP rises. I will have lost $100,000 if the price of the $TRUMP token doubles. In that scenario, my margin will be completely depleted, and this [futures] contract will have to be closed since I have lost everything I have. As long as I end the position in the green, I make money if the token’s price drops.

In other words, you are essentially managing two wallets. One is the wallet that contains all of your $TRUMP coins. How would you characterize the other one? Is that the revenue you’re making to cover the cost of entering the competition?

Since the contest organizers use the Solana wallet containing the $TRUMP tokens to decide who places in the top 220, it is the most significant wallet here. However, as I indicated before, I am structurally pessimistic about the $TRUMP token, and I wouldn’t want to go out to dinner and watch my money decline when the price of the $TRUMP token drops. I made the decision to essentially put on a hedge, in which I am essentially agnostic to any kind of price movement by using the other wallet and the short position. For that reason, I configured the other wallet.

I could have assumed the price risk, but that would have been risky because, usually, when these events approach the contest date, people begin to dump the $TRUMP tokens. In the event that the value of the $TRUMP token drops to, say, 90,000, the short wallet’s value of about 110,000 will balance it out. The total then comes to 200,000, which is the amount I ostensibly contributed from the beginning.

Did you profit from this?

I was, like, flat. At first, I wanted to earn some cash, but I believe the shorting I did was acceptable.

For the most part, I barely broke even on this trade.

Give me a moment. I thus initially shorted the token for the same amount. But as the contest drew to a close, I made the decision to expand the short position because, according to my thesis, I believed that people would start selling since they had nothing left to look forward to. Thus, I made that size larger. Interestingly enough, however, the cryptocurrency markets began to soar after May 8th, which coincided with the contest’s conclusion. Overall, I believe that I barely broke even on this trade.

Say that the cryptocurrency markets are “ripping.”. “.”.

When the US representatives were scheduled to meet with the Chinese representatives in Switzerland [for tariff negotiations], May 8th was essentially the Thursday before that weekend. The UK deal announcement was also made on that day. This was interpreted by the market as a bullish indication, which was subsequently translated into the positive euphoria surrounding the US-China negotiations. Everything began to rise.

All right. As a result, all markets suddenly became optimistic.

Yes, all of the tokens increased significantly.

According to the token price, the price of the $TRUMP coin was about 11 dollars on May 7th and 14 dollars on May 9th. The value of that token has decreased over time. However, in just two days, it increased by 40%.

What was the plan going into the final game? It seems like it was very erratic in the latter stages, which is why you had to increase your short position.

I believed that, if it makes sense, I could opportunistically profit at the end by shorting more than I owned.

[The contest organizers announced a new incentive last week: a rare “TRUMP DIAMOND HANDS” NFT, which would encourage winners to hold off on selling the coin before the dinner. ].

Why is it that this NFT is being offered to encourage people to go diamond hands?

Since Trump’s affiliates own a large amount of supply, I believe this relates to their incentives. As of the last time I checked, they control 80% of the supply. However, like many other [crypto] projects, that is locked up and only released gradually, preventing supply pressure on the first day. As a result, nobody wants to purchase the token. The NFT and the rewards program that follows, about which they have spoken but not yet disclosed the specifics, are intended to encourage holders to keep the token for a longer period of time. It could be argued that the price of the token would not decrease as much the longer people held it.

To keep retail interested, you must introduce all these little games, which is the only way to maintain the price high.

I’m confident that the affiliates will want to sell once their supply is unlocked, which could happen in three months, a year, or two. Clearly, they wish to sell for more money. And the only way to maintain a high price is to maintain retail engagement and interest in token ownership by introducing all these little games.

Do you need to repurchase all of the coin in order to obtain the NFT?

According to that tweet they sent, I understand that they essentially compare your wallet holdings on the final day of the contest with those on the day of the dinner. An NFT will be given to you if those match or if you have more.

I was a bit dumb. I ought to have sold about 90% of my tokens just before the 1:30 PM cutoff time. By doing this, I would only need to purchase 10% of what I had previously purchased on dinner day, and I believe I would be eligible for this NFT.

Wow. Have any individuals done that?

In other words, the NFT has not yet been dropped. I’m not sure about the details. Even glancing at that leaderboard page makes it evident that some people sold before the deadline, right? Because it’s a time-weighted calculation, there is a column with current holdings and several were zeroed out, but they are still in the top 220.

Why did they use time-weighted calculations instead of, say, simply calculating the total amount of money you had at the end?

This relates, in my opinion, to determining not just how much you hold but also how long you hold it, as well as how to reward different people. Therefore, you should receive a larger payout if you held $60 throughout the contest than if you held, say, $200 for a single day on the last day. I believe that the time-weighted calculation successfully attempts to account for that.

I also received a call from them that same day, which for a moment I mistook for spam.

In what ways have the contest organizers interacted with you regarding the dinner and contest?

The day of the contest, they informed me via email that I had placed in the top 220. Additionally, they called me that same day, which for a brief moment I mistook for spam. However, I realized that this was a real thing when the voicemail feature appeared. I answered the phone, and they simply confirmed that I had received the email and that, in order to be eligible for the dinner, I would need to complete a KYC [Know Your Customer check], which is a component of anti-money laundering regulatory compliance for banks, cryptocurrency exchanges, and other organizations.

Kindly provide us with your information, references, etc.

Yes, nothing very fancy. They hired a third party to do it, and I only had to give them my name, my nationality, and my address. No social security number, or similar information. in addition to my birthday. and I believe they simply performed an external check to ensure I wasn’t implicated in any crimes or anything similar.

I thought the vetting process was fairly light.

How professional do you think the process has been, and how thoroughly have they been screening you?

It seemed like a fairly superficial vetting process. For example, I spoke with someone about how entering the White House requires much more stringent requirements, such as presenting your passport. You really don’t have to do that here. All you need to do is present your ID at the door. That’s what they stated, anyway. Additionally, you’re okay as long as the information on your ID matches what you provided. Therefore, I don’t think the security is particularly stringent, but I suppose it’s adequate.

Do you have any experience with or knowledge of similar contests?

Well, I haven’t.

It’s crazy. If viewed in a way that is “divorced from most governmental ethics,” this is actually quite novel. Have you read that Trump might simply fail to show up for this?

I did see a statement that essentially stated that the president is not required to be present, according to the terms and conditions.

To be honest, I believe that many people aren’t actually there to see Trump. I might be completely mistaken, but it seems to me—for example, by looking at the crypto whales’ Telegram—that they would prefer to simply network with other crypto people. It would be great to be able to speak with Justin Sun and possibly obtain his contact details, if he is present.

For me and most likely others, I believe we’re more interested in finding out if this dinner yields any other noteworthy information. I’ll have my wallet ready, and if there’s any exciting news during the dinner that might have a positive impact on the price of the $TRUMP token—or any other token—I’ll buy it right away and try to make money.

Is this something that other attendees are considering as well?

Although I can’t be positive, it seemed implied based on that one Telegram user. For instance, the price might change if they announced a rewards program for a Trump event, such as saying that the NFT will be used for this and that the rewards will provide you with something truly amazing in three months. At the dinner table, I would then engage in a short-term trade.

That’s why I ultimately made the decision to download Truth Social after the $TRUMP token fell just before the inauguration.

That alone is an advantage of being the first to market.

Being a first mover in the cryptocurrency space is half of it. For this reason, I ultimately made the decision to download Truth Social after the $TRUMP token fell just before the inauguration. I only follow Trump. . I have notifications turned on for him and he is the only person I follow, which has really helped me. Was it April 9th when he tweeted that tariffs would now be delayed for 90 days? I saw that tweet on Truth Social right away, and I thought, “Oh, it’s time to trade my stocks, because I’ll be the first to know about it.”. On his account, he has undoubtedly revealed some nuggets.

Does the dinner itself present a profitable opportunity?

Or perhaps. It’s difficult to predict, but if it does, some potentially useful information may be shed.

What aspects of the process of creating this short are you especially proud of?

I am unsure if there is anything I would truly be proud of or boast about. For someone who is fairly involved in cryptocurrency, I believe this hedge trade would be fairly obvious. Since I did, in essence, go a little too big around my short towards the end of the contest, I believe I broke even. Thus, it compensated me for some of the fees I had to pay and other expenses. I am quite content. I am able to attend this dinner because I feel like I did not take any risks. In my opinion, that’s a win.

To start, I would have attempted to place in the top 25 if I had actual money. That costs a lot of money, and I don’t have any.

I’m not at all interested in seeing Trump. I’m more interested in seeing the other people in the top 25.

About a couple million, I believe.

In my opinion, you would need to have 200,000 tokens, which equates to about two or three million USD. Moreover, you should open a short position of about the same size if you wish to avoid the risk of the token price fluctuating. Making it a reality would require a capital investment of approximately four or five million dollars. However, meeting Trump and attending a more private networking event are two advantages of ranking in the top 25. I would personally like to attend both of these events. Seeing Trump doesn’t really matter to me. I’m more interested in seeing the other people in the top 25.

Do you know what the smallest wallet size that made 220 was?

It’s difficult to say because, because it’s time weighted, someone could have purchased a large quantity at first and then sold the majority of them halfway through because they were reasonably certain they would place in the top 220. [Calculating aloud is not included. Only fifty thousand, I suppose, [if you held the entire sum from the beginning to the end].

That’s not much, to be honest.

It isn’t. That number is most likely higher in reality. The problem is that this is not, say, a $50,000 payout that you will never see again. You may decide to sell your token after the meal. Although the price may have changed between when you originally purchased it and when you sold it, it is difficult to determine the precise loss—or even profit—that occurred.

Well, that makes the implications for campaign finance really intriguing.

The only thing I can think of to say is that the Trump team is unlikely to sell for at least a few months. Theoretically, nothing that happens between now and then will really affect the team, because if they hadn’t started this dinner contest and then, just before the unlock, they started another campaign or did something strange like this, that would instantly raise the price because cryptocurrency is so reflexive. Theoretically, they could then sell into the strength of the price movement.

However, I believe their goal here is to demonstrate that the $TRUMP token is more than just a meme coin; it is a useful tool. And since the $TRUMP token is more than just a meme, this is one way to make it worthwhile to own. If you purchase it, you can earn points and go out to dinner. NFTs are available. If they are launching a meme coin with utility value, it is essentially the playbook that many people may follow.

Yes, that’s a great way to put it: utility value.

Indeed, utility value in the sense that you can earn points that can be redeemed for future purchases, acquire an NFT, and go out to dinner. However, this differs somewhat from memes such as Shiba Inu, Doge, or Pepe. Their utility values are zero. They’re nothing more than a meme. If you own a lot of it, you can’t attend a dinner. It is only a meme.

The morning following dinner.

How is your crazy night out going?

It was excellent. Indeed, there was a sponsor who desired to host an after-party. The rooftop bar atop the Marriott was essentially rented out. I remained out until one in the morning.

It was good, though. The event itself was really fascinating. It’s clear that the demonstrations outside the dinner were somewhat unsettling. “Damn,” I thought, “should I actually walk into this thing?”.

Actually, I haven’t visited the Trump National. How does it function as a location?

It’s situated on the Potomac. The river is directly next to the lovely golf course, which is visible from the club. The podium was located directly in the front of the long room, and the tables were arranged so that there were numerous rows of tables but few columns, if that makes sense.

People began taking seats because they wanted to be closer to the podium, but I didn’t realize this until maybe an hour in. After a while, I realize that I really need a seat.

But in the end, none of that mattered because everyone rushed to the front, took out their phones, and began recording as soon as Trump entered, acting almost like a celebrity.

What interesting or enjoyable people did you meet?

Everyone wanted to speak with Justin Sun, but he was there. The only thing I could do, I suppose, was to greet him.

There were many people from other countries. A few people from Poland traveled all the way from Portugal, where they currently reside, to come here. A large number of Asians were present. I got to know some South Koreans. a few Italian and French men. A Croatian hedge fund manager came there specifically to look into this. An individual from Sweden.

Additionally, there were some market-making companies, such as Wintermute, which is a major player in the cryptocurrency space. Next up is a different man who works for Kronos Research. The creator of the Moonshot app was among the people the organizers brought. Moonshot must have collaborated with people on the $TRUMP launch in January. He claimed that he was only invited by the organizers and that he didn’t purchase any tokens because none of the staff members are permitted to trade [the meme coins] on their own platform due to a conflict of interest.

As reported by Crunchbase, Jupiter, a trading platform based in Solana, purchased Moonshot, an app that allows users to buy meme coins. Jupiter’s founder is reportedly a person going by the name “Meow,” but no other names seem to be publicly connected to either business. The guest that The Verge interviewed was unable to identify Meow from pictures. Ed. ].

Now that I think about it, there were a number of people in the cryptocurrency ecosystem who genuinely had insider knowledge that Trump would make a coin launch. Though they were unsure of the precise nature of that, they were aware that it would be a genuine coin. People were wondering whether Trump’s account had been hacked for the first hour or two [after the announcement]. I found it intriguing that many people were essentially prewired to it.

Yes, so it was a legitimate coin, and if those people knew, they had the advantage of being the first to market for the entire hour.

Indeed, the public was unaware of whether the Twitter account had been hacked or if the drop had been purposeful.

When I finally met one of the top winners, he told me about his strategy for hedging his trade.

Were there any ardent MAGAs there?

There must have been a couple of people. I simply never had the opportunity to talk to someone who is so strongly in favor of Trump. I think most of the people I talked to, especially the cryptocurrency traders and those with a close connection to the industry, said, “Yeah, I dumped this.”. The coin has already been sold. Because they didn’t want to take a chance on the coin, many people made the same hedge trade that I did.

One of the top winners I eventually met was sharing with me his trade hedging strategy. He was effectively avoiding price risk. He had a large position, so the funding was actually fairly significant. The only drawback is that shorting these tokens has a funding cost. He claimed that even though he had to pay roughly $50,000 in funding costs, he felt that it was worthwhile because he received a watch that is reportedly valued at $100,000 if you place in the top four.

They distributed watches, what?

Indeed. Justin was given the watch after he stood up and made his remarks.

In all honesty, it’s a pretty good deal to see the president for $50,000 and receive a watch worth twice that amount.

Yes. I was unaware of the existence of the TrumpWatches website until recently. I believe the host made reference to this, saying something like, “Go to the website if you want to watch.”. I asked myself if this was real, and when I visited the website, I discovered that it was.

Yes, there are a ton of watches with Swiss-made chrono movements.

Two of those were given away as raffle prizes, if you notice the one on the very front page.

Well, dude, that’s just five hundred dollars.

Yes, I do know, correct?

Lame. . Apparently, the $100,000 watch isn’t available for purchase on this website yet.

Only two of them could be prepared for the event due to their special design; the other two will be shipped to the winners.

[The website says that “only 10” of the “Crypto President Tourbillon Watch” have been produced, and it is currently available for pre-order. – Ed. ].

Was there a sense of discretion or did people post pictures or selfies?

Although there were undoubtedly cryptocurrency traders who preferred not to reveal their true identities and a few people who were attempting to avoid the spotlight and be camera shy, I believe that most people were just enjoying themselves while taking selfies.

Additionally, photographers were out and about snapping pictures of everybody. After all the gifts were distributed, the host said, “Everyone put on your hat that you got—it’s in my bag, it’s a Trump meme dinner hat — let’s all put it on and take a photo and then hashtag “trumpmemedinner” or whatever.” This was after Trump.

[The White House is not disclosing the names of those who attended. As of right now, the New York Times claims to have a copy of that list.

Despite the fact that images of the donated hats have gone viral on social media, no relevant hashtag appears to have taken off. —Ed. [].

Oh, I see. So they really urged you to post it online.

I assume the host took the picture, which was some sort of selfie.

The Trump speech was the other amusing instance. He mostly talked about his campaign, how he defeated Biden, and other such things, like how we were in a bad state with cryptocurrency before he was elected and how we are now in a great one.

That sounds just like something Trump would say. It was quite accurate.

In one instance, the microphone cracked, and he said, “Whoops, my ear.”. and he joked about the assassination attempt.

Was the afterparty the official one, and how did you find out about it?

Many people said that VIPs, such as the top 25 holders, would be the only ones allowed to attend the afterparty. A small number of people attempted to join this party, but it turned out that it wasn’t that exclusive. The second-ranked MemeCore group rented out space on the Marriott’s rooftop and successfully invited everyone. They said, “Yeah, feel free to take this bus and we’ll take you to the after-party,” as you were leaving the venue. A couple buses would arrive every ten minutes. Many people ultimately made the trip.

[At Trump’s crypto bribery event, a participant on TikTok was accused of covering his face “to hide their identities” while donning a massive mask that looked like the MemeCore mascot. – Ed. ].

Was the afterparty well-funded and how did it go?

They provided free drinks and an open bar. It wasn’t particularly noteworthy; it was fine.