Trump, Family Launch New Crypto Venture, Experts Raise Red Flags

US President Donald Trump and his family are launching the World Liberty Financial (WLFI), a cryptocurrency initiative, Fortune reported.

Instead of accumulating Bitcoin, this venture focuses on WLFI tokens, set to become tradeable in September. The company has raised $1.5 billion through a partnership with ALT5 Sigma, a publicly traded firm. As part of this deal, Eric Trump has been appointed to ALT5's board.

Critics say this venture mainly benefits the Trump family. They own a large share of WLFI and get three-quarters of the money from any WLFI tokens sold by World Liberty Financial. The WLFI tokens give very little control over the USD1 stablecoin, so it is unclear how much real value they have.

Experts warn that the "infinite money glitch" model, which relies on issuing new shares at a premium to acquire more assets, is unsustainable. Owen Lamont, a portfolio manager at Acadian Asset Management, told The Wall Street Journal, "This phenomenon violates every principle of finance."

Such strategies can lead to overvaluation and increased risk for investors.

"Clearly the main reason to want WLFI is to show public support for Trump," the WSJ report says. 

This follows a pattern observed in previous Trump-backed ventures. Trump Media & Technology Group's stock, which operates the Truth Social network, has experienced significant declines, falling 73 per cent from its peak. The $Trump memecoin saw a substantial drop of about 90 per cent from its high.

While the Trump Digital Trading Cards NFT collection has seen some success, with floor prices above $200, those who purchased at peak prices faced losses.

"There would have been even more losses in $Melania," analysts note.

One success has been the Trump digital trading card NFT, featuring images of Trump in superhero, space, and sporting themes. Sold for $99, the floor price currently sits above $200, though some buyers paid nearly $800, with individual sales ranging from $82 to $846.