Key Takeaways
Why is NMAX investing in TRUMP besides BTC?
NMAX’s TRUMP allocation is driven more by President Trump’s influence on the crypto market than a traditional risk/reward portfolio strategy.
Does the market support the allocation?
The broader market has disconnected from the TRUMP rallies, with the memecoin in a sustained downtrend and the technicals shifting toward further downtrend
Memecoins do not miss the institutional wave building around Digital Asset Treasuries (DATs). Dogecoin [DOGE] was the first to start this story, and now other meme items are stepping in the same direction.
Recently, NewsMax (NASDAQ: NMAX) announced plans to spend up to $5 million on Bitcoin over the next twelve months. [BTC] and official Trump [TRUMP]. If implemented, NMAX would join more than 100 public companies that own BTC.
However, NMAX would also become the first NYSE-listed company to acquire TRUMP. Given the high volatility of the token, this move begs the question of whether this is a calculated move or just a risky bet.
Breaking NMAX’s push for digital assets
Linking BTC to TRUMP looks like a calculated risk management strategy.
From a portfolio perspective, BTC acts as a store of value, while TRUMP adds a high-risk, high-reward component. Together they provide an allocation that combines long-term exposure with shorter-term opportunities.
That said, NewsMax CEO Christopher Ruddy noticed this that the move to TRUMP is largely influenced by President Donald Trump’s recent impact on the crypto market, which has contributed to significant bullish momentum.
“We are excited to add Trump Coin to our cryptocurrency plan as we believe the value of the coin should follow the success of the Trump presidency, which has been impressive thus far.”
In short, NMAX, which regularly reaches nearly 40 million Americans, has built its DAT strategy around President Trump’s influence on the crypto market, and, by extension, the dynamics of the TRUMP memecoin itself.
Notably, shortly after the announcement, a wallet bought $4 million worth of TRUMP, reflecting early bullish sentiment. The question is, does the technical data justify this move, or is it simply a case of ‘blind optimism’?
The market avoids the TRUMP meme trap
The memecoin’s link with President Trump appears to be losing steam.
Since April’s FUD, TRUMP has been in a sustained downtrend, losing nearly 70% from its peak of $16 and recently hitting a low of $1.25 amid the broader market-wide sell-off.
From a technical perspective, the daily chart remains bearish. Since its early May low of $11, TRUMP has formed five lower lows, recently breaking the $8 bottom and reaching the $1 zone, representing a 30% pullback.
Source: TradingView (TRUMP/USDT)
In short, the broader market is avoiding memecoin.
Even with President Trump’s pro-crypto recommendations (which NMAX’s CEO highlights as the key driver of his DAT strategy), the meme asset has failed to show a meaningful recovery, despite a 70% decline.
This indicates that the market has largely disconnected from short-term rallies in a highly volatile asset NMAX’s TRUMP Exposure an allocation with extremely high risk, where the risk/reward tends downwards.