By Medha Singh and Lisa Pauline Mattackal
(Reuters) – Donald Trump has taken a commanding lead over Joe Biden, at least in the world of political meme coins.
Crypto tokens linked to former President Trump have surged in volume and value in recent weeks as the November US presidential election approaches and arch rivals prepare for their first public debate.
The universe of so-called “PolitiFi” tokens is small, with a combined market value of around $1 billion. Most of them are linked to Trump, who has presented himself as a supporter of cryptocurrencies although he has not offered details about his proposed crypto policy.
Of the top 10 political meme coins by market value, seven are based on Trump, and many play on Trump's Make America Great Again slogan, such as MAGA and MAGA Hat, according to crypto platform CoinGecko, while only one, Jeo Boden, it's related. to President Biden, CoinGecko data shows.
The largest token linked to a political figure, MAGA, trades under a symbol called TRUMP on exchanges and was launched in late August 2023. Its market value has risen to $775 million in June from almost nothing in early anus.
In comparison, Jeo Boden, which was released in March this year, jumped as high as $648 million days after its release before gradually falling to $87 million.
Forrest Przybysz, cryptocurrency trader and CEO of Sistine Research, says that meme coins, by their nature, are not only highly speculative but also driven by attention cycles.
“The more attention a token can attract and hold, the higher its price will typically be… he added. “Trump is an attention magnet. Therefore, he is the ideal subject for a meme token.”
“We should expect the price and speculation on a Trump-based meme token to increase as we get closer to the election.”
Political tokens are a fraction of the $46 billion market value of meme coins (hyper-speculative, volatile and risky cryptocurrencies often fueled by internet pranks) that are themselves a niche segment of the broader cryptocurrencies of 2.3 trillion dollars, according to Coingecko estimates.
The origins of some of the tokens are murky and debated on social media by traders who fear a “rug pull,” where investors deposit money into fake projects only to discover that the coin’s developers have disappeared with the money.
Of the top 10 political tokens, which typically aim to capitalize on increased attention to political figures ahead of elections, eight were launched between May and June of this year, CoinGecko said.
“Meme coins are similar to non-fungible tokens in terms of being a collectible. The idea is to monetize public attention,” said Yan Liberman, co-founder of cryptocurrency research firm Delphi Digital.
However, exchanging these tokens is easier said than done. Few, if any, are listed on the largest centralized exchanges such as Coinbase (NASDAQ 🙂 or Binance. Most tokens are traded in pairs of ether or solana on smaller exchanges, each usually having a market value less than $100 million and are traded for fractions of a cent each.
QUESTIONABLE LEGITIMACY
Biden and Trump are very evenly matched in national opinion polls. The presidential debate between the two candidates on Thursday will be a critical event five months before the Nov. 5 vote.
Traders at Polymarket, a crypto site where users place stablecoin bets on future events, were betting on a 59% chance that Republican challenger Trump would unseat Democratic incumbent Joe Biden.
Political tokens rely on the popularity of political figures to gain traction, attracting retail investors with satirical or humorous names: “Funny is definitely a really big driving force of which tokens do well,” said Delphi Digital's Liberman.
Trump has not said he endorses or endorses any crypto tokens on his behalf. However, his criticism of Democrats' attempts to regulate the sector has increased his popularity among these tokens, Liberman said.
The broader crypto industry is spending tens of millions of dollars ahead of the US elections to boost crypto-friendly candidates. Investor twins Tyler and Cameron Winklevoss donated $2 million in bitcoin to support Trump last week, but a report said the donation was refunded because it exceeded the maximum amount allowed under federal law.
Bitfinex analysts said: “These tokens have become speculative assets in terms of the election results.”
