Key Takeaways
Why is NMAX investing in TRUMP alongside BTC?
NMAX’s TRUMP allocation is driven more by President Trump’s influence on the crypto market than by a traditional risk/reward portfolio strategy.
Does the market support the allocation?
The broader market has decoupled from TRUMP rallies, with the memecoin in a sustained downtrend and technicals skewed toward further downside
Memecoins aren’t missing out on the institutional wave building around Digital Asset Treasuries (DATs). Dogecoin [DOGE] was the first to spark this narrative, and now other meme assets are stepping into the same lane.
Recently, NewsMax (NASDAQ: NMAX) announced plans to allocate up to $5 million over the next 12 months toward Bitcoin [BTC] and Official Trump [TRUMP]. If executed, NMAX would join over 100 public firms holding BTC.
However, NMAX would also become the first NYSE-listed company to hold TRUMP. Considering the token’s high volatility, the move raises the question of whether this is a calculated move or simply a risky bet.
Breaking down NMAX’s push into digital assets
Pairing BTC with TRUMP looks like a calculated risk management strategy.
From a portfolio standpoint, BTC acts as a store of value while TRUMP adds a “high-risk, high-reward” component. Together, they offer an allocation that combines long-term exposure with shorter-term opportunities.
That said, NewsMax CEO Christopher Ruddy noted that the move into TRUMP is largely influenced by President Donald Trump’s recent impact on the crypto market, which helped drive significant bullish momentum.
“We are excited to add Trump Coin to our cryptocurrency plan, as we believe the coin’s value should track the success of the Trump presidency, which so far has been impressive.”
In short, NMAX, which reaches nearly 40 million Americans regularly, 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. However, the question is, do the technicals justify this move, or is it simply a case of “blind optimism”?
Market steers clear of the TRUMP meme trap
The memecoin’s link to President Trump seems to be losing traction.
Since the April FUD, TRUMP has been in a sustained downtrend, losing nearly 70% from its $16 peak and recently hitting an all-time low of $1.25 amid the broader market-wide selloff.
From a technical perspective, the daily chart remains bearish. Since its early-May low of $11, TRUMP has formed five lower lows, recently breaking $8 floor and entering the $1 zone, representing a 30% pullback.
Source: TradingView (TRUMP/USDT)
In short, the broader market is steering clear of memecoin.
Even with President Trump’s pro-crypto endorsements (which NMAX CEO highlights as the key driver of its DAT strategy) the meme-asset hasn’t posted a meaningful recovery, despite a 70% drawdown.
This indicates that the market has largely decoupled from short-term rallies in a highly volatile asset, making NMAX’s TRUMP exposure an extremely high-risk allocation, with the risk/reward skewed toward the downside.