Ten months into President Trump’s term, the so-called "Trump Trade" has unraveled. Once a retail investor favorite, Trump Media & Technology (DJT) has seen its stock price collapse by 75%, while meme tokens tied to the Trump brand have lost nearly all value. In stark contrast, gold has surged to a record $4,200 per ounce, cementing its role as the ultimate safe-haven asset amid deficit concerns.
Faith Collapse: DJT and Memecoins
Retail investors who piled into DJT at last year’s highs are facing steep losses. A Wall Street Journal report highlighted one investor who bought at $46, only to see shares sink to $11. Analysts note that even after the plunge, DJT's price-to-sales ratio remains at 1240x, far above the typical 5–10x range for tech stocks. The valuation underscores how hype, rather than fundamentals, drove the rally.
The pain is even worse in crypto. Trump-themed memecoins have dropped between 86% and 99%, leaving them essentially worthless. Even the much-hyped World Liberty Financial token, launched in September, has fallen 40%. Alpine Macro strategist Nick Giorgi called it "a hangover after speculative frenzy," pointing out that unprofitable tech portfolios have also dropped 21% as funds flee hype-driven assets.
Gold Surges, Bitcoin Stalls
Ironically, while Bitcoin was expected to benefit from deregulation, it has fallen 30% since October. Gold, however, has soared nearly 60% this year, hitting $4,200. Institutional investors cite fiscal deficits and a weakening dollar as reasons to favor gold over volatile crypto. Hedge funds have also turned to shorting long-term Treasuries to hedge interest rate risk.
Diverging Industry Trends
Not all Trump-linked trades have collapsed.
- Healthcare and European defense stocks held steady, reflecting policy leanings.
- Wall Street banks benefited from expectations of lighter regulation.
- Regional banks and private prisons, however, disappointed, as immigration policy bets failed to materialize.
This divergence highlights how political themes can create short-term winners but rarely sustain broad market rallies.
Back to Fundamentals
With political fervor fading, markets are refocusing on data. The core PCE price index, due this week, will be closely watched as the Fed weighs another December rate cut. Bob Elliott of Unlimited Funds noted that while crypto losses are severe, there is no sign of systemic risk.
For investors, the lesson is clear: the days when a single name or theme could double a stock price are gone. Fundamentals—profitability, cash flow, and valuation—are regaining control. As 2025 winds down, Wall Street appears to be weaning itself off politically exposed trades and returning to the basics.