Donald Trump has established a commanding advantage over Joe Biden in political meme coins
In recent weeks, the volume and value of crypto tokens associated with former President Trump have increased significantly as the November U.S. presidential election approaches and the arch-rivals prepare for their first public debate.
The market value of the “PolitiFi” tokens is approximately $1 billion, and their universe is relatively small. Most of these are associated with Trump, who has positioned himself as a cryptocurrency proponent even though he has not provided any specifics regarding his proposed crypto policy.
According to CoinGecko, the crypto platform, seven of the top 10 political meme coins by market value are based on Trump, with many riffing on Trump’s Make America Great Again slogan, including MAGA and MAGA Hat. Only one of the top 10 coins, Jeo Boden, is associated with President Biden, according to CoinGecko data.
MAGA, the most significant token associated with a political figure, is traded on exchanges under the ticker TRUMP and was introduced in late August 2023. Its market value has increased from virtually nothing at the beginning of the year to as high as $775 million in June.
In contrast, Jeo Boden, established in March of this year, experienced a significant increase in value, reaching as high as $648 million within days of its introduction. Subsequently, its value declined to $87 million.
According to Forrest Przybysz, the CEO of Sistine Research and a cryptocurrency trader, meme currencies are also driven by attention cycles and are highly speculative.
“Typically, the greater the level of attention a token can attract and sustain, the higher its price will be,” he continued. “Trump is a magnet for attention.” Consequently, he is the optimal subject for a meme token.
“We should anticipate that the price and speculation on a meme token based on Trump will increase as the election approaches.”
Political tokens are a small portion of the $46 billion market value of meme coins, hyper-speculative, volatile, and risky cryptocurrencies frequently driven by internet jokes.
Meme coins are a niche segment of the broader $2.3 trillion cryptocurrency market, according to Coingecko estimates.
Traders who are apprehensive about a “rug pull” when investors deposit money in fraudulent projects only to discover that the coin’s developers have departed with the money have debated the origins of specific tokens on social media.
Eight of the top 10 most oversized political tokens, which typically capitalize on the increased focus on political figures ahead of elections, were launched between May and June of this year, according to CoinGecko.
“Meme coins are comparable to nonfungible tokens in that they are considered a collector’s item.” Yan Liberman, co-founder of Delphi Digital, a crypto research firm, stated, “The concept is to monetize public attention.”
Nevertheless, discussing the trading of these tokens is simpler than executing it. Only some, if any, are listed on the largest centralized exchanges, such as Binance or Coinbase.
Each token typically has a market value of less than $100 million and is traded for fractions of a penny on smaller exchanges. The majority of the tokens are traded in ether or Solana pairs.
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In national opinion polls, Biden and Trump are in a dead heat. A critical event will be the presidential debate between the two candidates on Thursday, five months before the Nov. 5 vote.
Traders on Polymarket, a cryptocurrency platform allowing users to place wagers with stablecoins on future events, predicted a 59% likelihood that Republican challenger Trump would defeat Democratic incumbent Joe Biden.
Retail investors are attracted to political tokens by their satirical or humorous names, which capitalize on the popularity of political figures to acquire traction. Delphi Digital’s Liberman stated, “Funny is undoubtedly a significant factor in the success of tokens.”
Trump has not endorsed or supported any crypto token in his name. Nevertheless, Liberman asserted that his criticism of Democrats’ efforts to regulate the sector has increased his popularity among these tokens.
Tens of millions of dollars are being spent by the broader crypto industry in anticipation of the U.S. election to support crypto-friendly candidates.
According to a report, the donation of $2 million in Bitcoin by investor twins Tyler and Cameron Winklevoss to support Trump last week was refunded, as it exceeded the utmost amount permitted under federal law.
According to analysts at Bitfinex, “These tokens have become speculative assets in relation to the election results.”