Medha Singh and Lisa Pauline Mattakal
(Reuters) – Donald Trump has taken the lead over Joe Biden – at least in the world of political memes.
Crypto tokens associated with former President Trump have surged in volume and value in recent weeks as the November US presidential election approaches and major rivals prepare for their first public debates.
The universe of so-called “PolitiFi” tokens is tiny, with a combined market value of about $1 billion. Most of them are associated with Trump, who has positioned himself as a champion of cryptocurrencies, although he has not revealed the details of his proposed crypto policies.
Of the top 10 political meme coins by market value, seven are based on Trump, with many playing on Trump’s “Make America Great Again” slogan, such as MAGA and MAGA Hat, according to crypto platform CoinGecko, and only one is Geo Boden – connected with him. President Biden, CoinGecko data shows.
The largest political figure-related token, MAGA, is traded on exchanges under the ticker TRUMP and was launched in late August 2023. Its market value jumped to $775 million in June from near zero at the start of the year.
In comparison, Jeo Boden, which launched in March this year, jumped to $648 million a few days after launch before gradually falling to $87 million.
Forrest Przybysz, a cryptocurrency trader and CEO of Sistine Research, says meme coins are not only highly speculative in nature, but also driven by attention cycles.
“The more attention a token can attract and hold, the higher its price will be…” he added. “Trump is an attention magnet. Therefore, he is an ideal object for a meme token.”
“We should expect the price and speculation of a Trump-based meme token to increase as we get closer to the election.”
Political tokens make up just a fraction of the $46 billion market value of meme coins – hyperspeculative, volatile and risky cryptocurrencies often driven by internet jokes – which Coingeco estimates are themselves a niche segment of broader cryptocurrencies worth 2. 3 trillion dollars.
The origins of some tokens are unclear and are being debated on social media by traders wary of “rug pulls,” where investors pour money into fake projects only to find that the coin’s developers have disappeared along with the money.
Of the top 10 political tokens, which typically aim to capitalize on increased attention on political figures in the lead-up to elections, eight launched between May and June this year, CoinGecko said.
“Meme coins are similar to non-fungible tokens in that they are collectibles. The idea is that you monetize public attention,” said Jan Lieberman, co-founder of crypto research firm Delphi Digital.
However, trading these tokens is easier said than done. Few, if any, are listed on major centralized exchanges such as Coinbase (NASDAQ:) or Binance. Most tokens are traded in Ether or Solana pairs on small exchanges, each of which typically has a market value of less than $100 million and trades for fractions of a cent per share.
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Biden and Trump are neck and neck in national opinion polls. Thursday’s presidential debate between the two candidates will be a crucial event five months before the Nov. 5 vote.
Traders on Polymarket, a crypto site where users bet using stablecoins on future events, were betting on a 59% chance that GOP challenger Trump would unseat Democratic incumbent Joe Biden.
Political tokens rely on the popularity of political figures to gain traction, enticing retail investors with satirical or humorous names: “Fun is definitely the real driving force behind why tokens do well,” said Delphi Digital’s Lieberman.
Trump has not said he endorses or supports any cryptocurrency token on his behalf. However, according to Lieberman, his criticism of Democratic attempts to regulate the sector has increased his popularity among these tokens.
The crypto industry as a whole is spending tens of millions of dollars in the lead-up to the US elections to support crypto-friendly candidates. Investor twins Tyler and Cameron Winklevoss donated $2 million in Bitcoin to support Trump last week, but a report says the donation was returned because it exceeded the maximum amount allowed by federal law.
Bitfinex analysts said: “These tokens themselves have become speculative assets in terms of election results.”