Investors haven’t seen much news regarding non-fungible tokens (NFTs) recently. But that changed earlier this week when Donald Trump announced that he would be venturing into the digital asset space. The former president turned many heads earlier this week when he confirmed plans to launch a line of digital Trump trading cards. These digital assets are available through their own website and feature him in superhero and other action hero-type scenarios. They are priced at $99, which does not include a transaction fee. In typical Trump fashion, this news was billed as a “MAJOR ANNOUNCEMENT” on his social network Truth Social. But as InvestorPlace contributor Chris MacDonald reports, it did nothing for Trump-linked Digital World Acquisition Corp (NASDAQ:DWAC) except push shares down.
Why wouldn’t markets respond well to the prospect of a line of Trump trading cards? Let’s take a closer look at the former president’s latest endeavor.
Timing Is Everything for the Trump Trading Cards
Trump clearly doesn’t have anyone on his team who understands digital asset markets. If he did, he likely wouldn’t have launched the Trump trading cards. Anyone who follows the NFT market knows that this is a highly inopportune time for someone to venture into the space. In October 2022, it was down by every important metric. One month later, prices fell even more as the FTX collapse threatened digital assets on a truly monumental level. Since then, the crypto contagion has dragged on. For NFT creators, that’s very bad news since most of their sales are in crypto.
Like other NFT packages, Trump’s digital cards come with other perks, such as the chance to join Trump for a golf outing. However, just being entered into a sweepstake doesn’t actually add much value to an asset. It’s true that Trump’s NFT line has been selling, actually selling out within a day. But that doesn’t mean that these impulsive purchases are good investments. These Trump trading cards are already showing signs of not retaining value, even as they are listed for resale. As Fast Company reports:
“Take, for instance, Trump Digital Trading Card #10337, which shows the former president ripping open his shirt to show a superhero outfit (with a giant T across his chest) and the Statue of Liberty and an American flag waving in the background. Originally sold for 0.095 Ether (about $120), the best offer on it by midday Thursday stood at around 0.0565 Ether (roughly $71.89). Similar bids are offered on several other Trump NFTs.”
The outlet also notes that many conservative personalities have expressed disdain at Trump’s news. This also doesn’t bode well for the Trump trading cards as an asset class. Trump ally Steve Bannon has called for the people behind the NFT launch to be fired. Even the editorial board of the conservative New York Post has spoken out against Trump, dismissing the NFTs as “another money grab” and urging investors to avoid them.
What’s Next for Trump?
Trump isn’t the first politician to see the power of NFTs. Throughout the 2022 midterms, candidates on both sides of the aisle utilized them as part of their campaign fundraising strategies. What the Trump team doesn’t seem to have realized, though, is that when these candidates ventured into the NFT space, it was early 2022 and markets were considerably stronger. Now that NFTs have been disregarded by much of the financial community, Trump’s line is likely to be written off as a joke.
If Fast Company’s report is any indication, the Trump trading cards will likely fail to retain their value, making it difficult to sell more in the future. The former president should avoid sections of the market that he clearly doesn’t understand.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.