By Medha Singh and Lisa Pauline Mattackal
(Reuters) – Donald Trump has taken a commanding lead over Joe Biden – on this planet of political meme cash, not less than.
Crypto tokens linked to former President Trump have leapt in quantity and worth in latest weeks because the November U.S. presidential election heaves into view and the arch-rivals put together for his or her first public debate.
The universe of the so-called “PolitiFi” tokens is tiny, with a mixed market worth of about $1 billion. A majority of these are linked to Trump, who has introduced himself as a champion for cryptocurrency though he hasn’t provided specifics on his proposed crypto coverage.
Of the highest 10 political meme cash by market worth, seven are based mostly on Trump, with many enjoying on Trump’s Make America Nice Once more slogan, comparable to MAGA and MAGA Hat, in keeping with crypto platform CoinGecko, whereas just one – Jeo Boden – is expounded to President Biden, CoinGecko information reveals.
The biggest token linked to a political determine, MAGA, trades below a ticker referred to as TRUMP on exchanges and was launched in late August 2023. Its market worth has leapt as excessive as $775 million in June from almost nothing at first of the yr.
By comparability, Jeo Boden, which launched in March this yr, jumped to as a lot as $648 million days after its launch earlier than progressively sliding to $87 million.
Forrest Przybysz, a cryptocurrency dealer and CEO of Sistine Analysis, says meme cash by their nature usually are not solely extremely speculative but in addition pushed by consideration cycles.
“The more attention a token can hold and maintain, usually the higher it’s price will go … he added. “Trump is an consideration magnet. Subsequently he’s the perfect topic for a meme token.”
“We should always anticipate price and hypothesis on a Trump-based meme token to rise as we get nearer to the election.”
Political tokens are a fraction of the $46 billion market value of meme coins – hyper-speculative, volatile and risky cryptocurrencies often driven by internet jokes – which are themselves a niche segment of the broader $2.3 trillion cryptocurrencies, per Coingecko estimates.
The origins of some of the tokens are obscure and debated on social media by traders wary of a “rug pull”, where investors deposit money in phony projects only to find the coin’s developers have vanished with the money.
Of the top 10 biggest political tokens, which typically aim to capitalize on the increased attention on political figures ahead of elections, eight were launched between May and June this year, CoinGecko said.
“Meme cash are just like nonfungible tokens when it comes to being a little bit of collectors’ merchandise. The concept is that you just monetize public consideration,” said Yan Liberman, co-founder at crypto research firm Delphi Digital.
However, trading these tokens is easier said than done. Few, if any, are listed on the biggest centralized exchanges such as Coinbase (NASDAQ:) or Binance. Most of the tokens are traded in ether or solana pairs on smaller exchanges, each typically have a market value of below $100 million and trade for fractions of a cent apiece.
QUESTIONABLE LEGITIMACY
Biden and Trump are neck-and-neck in national opinion polls. A presidential debate between the two candidates on Thursday will be a critical event five months before the Nov. 5 vote.
Traders on Polymarket, a crypto site where users place bets with stablecoins on future events, were betting on a 59% chance that Republican challenger Trump would unseat Democratic incumbent Joe Biden.
Political tokens bank on the popularity of political figures to gain traction, enticing retail investors with satirical or humorous names: “Humorous is actually an genuine huge driving pressure of which tokens do nicely,” mentioned Delphi Digital’s Liberman .
Trump hasn’t mentioned he endorses or backs any crypto token in his identify. Nevertheless, his slamming of Democrats’ makes an attempt to control the sector has boosted his recognition amongst these tokens, Liberman mentioned.
The broader crypto business is spending tens of tens of millions of {dollars} forward of the U.S. election to spice up crypto-friendly candidates. Investor twins Tyler and Cameron Winklevoss donated $2 million in bitcoin to assist Trump final week however a report mentioned the donation was refunded because it exceeded the utmost quantity allowed below federal legislation.
Analysts at Bitfinex mentioned: “These tokens have turned into speculative assets themselves in terms of the election results.”