Many experts believe that Donald Trump will positively impact the crypto market more than Kamala Harris. However, the impact on the meme coin segment remains a matter of debate.

According to Columbia Business School professor Omid Malekan, Trump’s success in the election could negatively impact the meme coin sector. He argues that meme coins represent a form of economic populism, acting as a statement against the perceived unfairness in traditional financial systems.

“If Trump wins and the Republicans sweep, it could be bearish for meme coins.”

Malekan further explains that investor interest in meme coins has increased due to dissatisfaction with the tokenomics of venture-backed projects. Should Trump become president, potential changes in regulations might allow token holders to benefit more directly from dividends and fees, potentially reducing interest in meme coins.

Meme Coins as a Response to SEC Policies

Meme coins have emerged as a response to the stringent policies of the U.S. Securities and Exchange Commission (SEC). Nic Carter, co-founder and general partner of Castle Island Ventures, suggests that a Republican victory with Trump at the helm could soften these policies, leading to a decline in meme coin popularity.

Carter supports Malekan’s view, stating that better regulation in the crypto sphere will serve as a bearish factor for meme coins. However, he believes that while demand for meme coins might decrease, it will not disappear entirely due to ongoing speculative interests.

Opinions from the Crypto Community

Reactions to these statements vary. Blogger and influencer Murad argues that the growth of meme coins is driven more by economic factors than political ones. He believes that the election results will not significantly impact this sector.

“99% of meme coin buyers couldn’t care less about politics. There are larger socio-economic forces at play.”

Another popular blogger, Jordan Fish, known as Cobie, disagrees with Malekan and Carter. He emphasizes that ordinary traders’ interest in meme coins remains high since they cannot participate in large projects in the early stages.

Meme Coins and the U.S. Election

The meme coin sector has become the fastest-growing segment in the crypto industry in 2024, rising by more than 1800% since the beginning of the year. As the U.S. election approaches, meme coins associated with Donald Trump have seen a significant increase in volume and price.

This category holds a small capitalization relative to the entire meme coin market. Coingecko estimates its size at $1.2 billion, which is 2.4% of the entire market, with only four of them having a capitalization above $100 million. Despite this, they have attracted considerable attention from the crypto community.

Forrest Przybysz, a trader and CEO of Sistine Research, notes that the popularity of meme coins is driven by attention cycles. The more attention they receive, the higher their value will be.

“Trump is an attention magnet. Therefore, he is the ideal subject for a meme token.”

Yan Liberman, co-founder at crypto research firm Delphi Digital, emphasizes that meme coins act as collectibles, allowing for the monetization of public attention.

“Meme coins are similar to non-fungible tokens in terms of being collectibles. The idea is that you monetize public attention.”

Thus, if Trump’s election promises come to fruition, America could see a new boom in the cryptocurrency segment. However, the question of meme coins remains open — these coins are unlikely to have any practical utility or strategic importance for the development of the decentralized finance market.

The crypto market is likely to face volatility as the U.S. presidential elections approach, but the nature of this volatility remains uncertain.

#AI #Finance

Post Views: 5