Many experts believe that Donald Trump will have more positive impact on the crypto market 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 have a negative impact on the coin industry.
The expert noted that investor interest in meme coins has increased due to disappointment with the tokenomics of venture capital-backed projects. If Trump becomes president, the Republican Party could change some rules allowing token holders to benefit from dividends and fees, which could reduce interest in meme coins.
Meme Coins in Response to SEC Policies
Meme coins have become a kind of response to the tough policies of the US Securities and Exchange Commission (SEC), so their softening in the event of a Republican victory with Donald Trump at the helm will result in a withdrawal, said co-founder and general partner of Castle Island Ventures, Nic Carter.
This is how he commented on the publication by Columbia Business School professor Omid Malekan. In it, he calls on the Solana Project community to support the Democrats, represented in the presidential elections by Kamala Harris.
The expert argued his opinion as follows:
- Meme coins represent economic populism and a protest against traditional crypto assets and venture capitalist participation.
- Institutionally funded projects become a response to the “repressive policies” of SEC Chairman Gary Gensler and Senator Elizabeth Warren.
- A Republican victory could strengthen the position of important traditional crypto assets. This will introduce economic mechanisms for token holders that are absent from meme coins.
Malekan insisted that better regulation of the crypto sphere in the United States would act as a “bearish” factor for meme coins. Carter supported this, saying that if the SEC’s position changed, the demand for meme coins would decrease, but it would not completely disappear due to existing speculative interests.
Opinions of the crypto community
People react differently to these statements. Blogger and influencer Murad believes that the growth of meme coins is not due to political but economic factors, and the election results are unlikely to have a significant impact on this sector.
Another popular blogger, Jordan Fish, known as Cobie, also disagrees with Malekan and Carter, pointing out that ordinary traders’ interest in meme coins remains high since they cannot participate to big projects at the beginning.
Meme coins and the American elections
The meme coin sector has become the fastest growing sector in the crypto industry in 2024, surging over 1,800% year-to-date. Ahead of the US election, meme coins associated with Donald Trump saw a sharp increase in volume and price.
This category holds a small capitalization compared to the entire meme coin market. Coingecko estimated its size at $1.2 billion, or 2.4% of the entire market, with only four of them having a capitalization above $100 million. However, this has not stopped them from attracting the attention of the crypto community.
Forrest Przybysz, trader and CEO of Sistine Research, noted that the popularity of meme coins is based on attention cycles, and the more attention they receive, the higher their value will be.
“Trump gets attention. It is therefore the ideal subject for a meme token.
Forrest Przybysz, cryptocurrency trader and CEO of Sistine Research
Yan Liberman, co-founder of crypto research firm Delphi Digital, pointed out that meme coins act as collectibles, enabling the monetization of public attention.
“Meme coins are similar to non-fungible tokens in that they are a bit of a collectible. The idea is to monetize the audience’s attention.
Yan Liberman, co-founder of crypto research company Delphi Digital
So, if Trump’s election promises come true, America will experience a new boom in the cryptocurrency segment. However, the question of meme coins remains open: it is unlikely that these coins will have any practical use or strategic importance for the development of the decentralized financial market.
One way or another, the crypto market will likely face volatility as the US presidential elections approach. But it’s not clear what kind of volatility it will be.
