What Will Happen to the Meme Coin Market if Trump Wins?

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

According to Columbia Business School professor Omid Malekan, Trump’s election success could negatively affect the meme coin industry.

To further endear myself to Solana fans, I will present an argument for why a Trump win and/or a Republican victory (where Polymarket owns 50%) would lead to a bearish trend in memecoins.

i) Memecoins themselves are a form of economic populism. They are a statement against injustice (and often fraud)…

— Omid Malekan 🧙🏽‍♂️ (@malekanoms) 27 October 2024

The expert stated that investors’ interest in meme coins has increased due to disappointment in the tokenomics of venture-backed projects. If Trump becomes president, the Republican Party may change some rules that allow 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 harsh policy of the US Securities and Exchange Commission (SEC), so their softening will lead to a decline if the Republicans triumph under the leadership of Donald Trump. – Nic Carter, founder and general partner of Castle Island Ventures.

This is how Columbia Business School professor Omid commented on Malekan’s post. Here, Solana called on the project community to support the Democrats represented by Kamala Harris in the presidential election.

The expert defended his opinion as follows:

Meme coins represent economic populism and a protest against traditional crypto assets and the participation of venture investors. Corporately funded projects are becoming a response to the “oppressive policies” of SEC Chairman Gary Gensler and Senator Elizabeth Warren. A Republican victory could strengthen the position of key traditional crypto assets. This will offer economic mechanisms to token holders that are not available in meme coins.

Malekan insisted that better regulation of the cryptocurrency space in the US would be a “bearish” factor for meme coins. Carter supported him, saying that if the SEC’s position changes, the demand for meme coins will decrease but will not disappear completely due to existing speculative interests.

Views of the crypto community

People react differently to these statements. Blogger and influencer Murad believes that the growth in meme coins is due to economic factors, not political, and that the election results are unlikely to significantly affect this industry.

99% of Memecoin buyers don’t care about Politics

There are secular socio-economic forces far greater than a single election

The rise of Memecoins has more to do with the persistently increasing Global Currency Supply.

Will this stop under Trump? No.…

— Murad 💹🧲 (@MustStopMurad) 27 October 2024

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

Meme coins and the US Election

The meme coin sector has become the fastest growing sector in the crypto industry in 2024, increasing by more than 1800% since the beginning of the year. There has been a sharp increase in the volume and price of meme coins associated with Donald Trump ahead of the US elections.

This category has a small capitalization relative to the entire meme coin market. Coingecko estimated its size at $1.2 billion; That’s 2.4% of the entire market, and only four have a capitalization above $100 million. However, this did not stop them from attracting the attention of the crypto community.

Forrest Przybysz, trader and CEO of Sistine Research, stated that the popularity of meme coins is based on attention cycles, and the more attention they receive, the higher their value will be.

“Trump is an attention magnet. Therefore it is an ideal subject for a meme token.”

Forrest Przybysz, cryptocurrency trader and CEO of Sistine Research

Yan Liberman, co-founder of crypto research company Delphi Digital, emphasized that meme coins act as collectibles, allowing the public’s attention to be turned into money.

“Meme coins are somewhat like non-fungible tokens in that they are collectibles. The idea is that you make money from public attention,”

Yan Liberman, co-founder of crypto research company Delphi Digital

Therefore, if Trump’s election promises come true, America will experience a new boom in the cryptocurrency segment. However, the issue of meme coins is still open; coins are unlikely to have any practical benefit and strategic importance for the development of the decentralized financial market.

One way or another, the crypto market is likely to face volatility as the US presidential election approaches. But it’s not entirely clear what kind of volatility this will be.