Trump-Linked Crypto Tokens Plummet Amid Democrat Investigation

The sharp decline for the Official Trump (TRUMP) and World Liberty Financial (WLFI) tokens was catalyzed by an investigation launched by Representative Ro Khanna (D-CA). The probe centers on a $500 million investment deal between World Liberty Financial—co-founded by Donald Trump and his Special Envoy to the Middle East, Steve Witkoff—and Sheikh Tahnoon bin Zayed Al Nahyan of the UAE royal family. According to the investigation’s press release, the concern is “how conflicts of interest may be influencing U.S. government policies,” particularly regarding competition with China.

The timing of the investment is critical. A Wall Street Journal report indicated it preceded a subsequent deal in which the Trump administration approved the export of roughly 500,000 advanced AI chips to the UAE, including to Tahnoon’s firm, G42. The Biden administration had previously blocked similar deals over G42’s links to sanctioned Chinese companies like Huawei. This sequence prompted Senator Chris Murphy (D-CT) to label the undisclosed investment “open corruption.” The investigation also seeks information on World Liberty Financial’s role in facilitating a $2 billion investment by Abu Dhabi’s MGX into Binance, which utilized the company’s own USD1 stablecoin.

The market reaction was swift and severe. Per CoinGecko data, TRUMP is now priced at $3.41, marking a 95% collapse from its all-time high of $37.43 in January 2023. WLFI has sunk to $0.111, a 67% decline from its peak last September. While the wider crypto market cap fell 2.8% to $2.37 trillion, these Trump-linked assets suffered losses more than triple the market average, highlighting their acute sensitivity to political news.

The troubles for TRUMP and WLFI are unfolding against a backdrop of significant strain across the cryptocurrency sector. According to eToro analyst Simon Peters, a potent mix of factors is driving a risk-off sentiment. “Recent geopolitical tensions, macroeconomic uncertainty, disappointing earnings forecasts and the threat of quantum computing is causing institutional investors to rethink tech valuations and their exposure to crypto,” Peters told Decrypt.

This reassessment has manifested in dramatic outflows from spot Bitcoin ETFs, creating substantial selling pressure and triggering a cascade of liquidations in leveraged positions. Peters notes that Bitcoin is now approaching a technically crucial level: its 200-week moving average, historically a strong support zone following major corrections. “For the technical analysts, Bitcoin is not far off its 200-week moving average [currently between $55,000 and $58,000], which historically has acted as a strong level of support,” he said, citing precedents from 2015, 2018, 2020, and 2022.

The investigation places a spotlight on the structure and connections of World Liberty Financial. The firm lists Donald Trump and Steve Witkoff as “co-founders emeritus,” while Witkoff’s son Zach serves as CEO. The company asserts that neither Trump nor his family members hold any formal role as “director, officer or employee.” However, this distinction has done little to insulate its associated digital assets from the fallout of political scrutiny.

The probe into the firm’s dealings with Sheikh Tahnoon and its facilitation of the Binance investment via its USD1 stablecoin underscores the complex intersection of politics, traditional finance, and digital assets. As the investigation seeks documents and details, it raises questions about the vulnerability of crypto tokens tied to politically exposed persons and entities. The sharp underperformance of TRUMP and WLFI compared to major tokens like Bitcoin demonstrates how idiosyncratic political risk can rapidly decouple such assets from broader market trends.