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Trump hits Biden with meme coins
By Medha Singh and Lisa Pauline Mattackal
(Reuters) – Donald Trump has taken the lead over Joe Biden, at least in the world of political meme coins.
Crypto tokens linked to former President Trump have surged in volume and value in recent weeks as November’s US presidential election approaches and bitter rivals prepare for their first public debate.
The universe of so-called “PolitiFi” tokens is tiny, with a combined market value of around $1 billion. Most of these are related to Trump, who has portrayed himself as a supporter of cryptocurrency, although he offered no details on his proposed crypto policy.
Of the top 10 political meme coins by market value, seven are Trump-based, many of which play on Trump’s slogan Make America Great Again, such as MAGA and MAGA Hat, according to crypto platform CoinGecko, while only one – Jeo Boden – is related to President Biden, CoinGecko data shows.
The largest token linked to a political figure, MAGA, trades under a ticker called TRUMP on the exchange and was launched in late August 2023. Its market value jumped to $775 million in June from nearly zero all start of the year.
By comparison, Jeo Boden, which launched in March this year, jumped to $648 million a few days after its launch before gradually sliding to $87 million.
Forrest Przybysz, cryptocurrency trader and CEO of Sistine Research, says meme coins by their nature are not only highly speculative but also driven by attention cycles.
“The more attention a token can hold and maintain, usually the higher its price will be…” he added. “Trump is an attention magnet. Therefore he is the ideal subject for a token meme.”
“We should expect the price and speculation on a Trump-based meme token to increase as we get closer to the election.”
Political tokens are a fraction of the $46 billion market value of meme coins – hyperspeculative, volatile and risky cryptocurrencies often driven by internet jokes – which are themselves a niche segment of the broader $2.3 trillion cryptocurrencies. dollars, according to Coingecko estimates.
The origins of some tokens are murky and debated on social media by traders wary of a “rug pull,” in which investors deposit money into bogus projects only to find that the coin’s developers have vanished with the money.
Of the top 10 political tokens, which typically aim to capitalize on the growing attention on political figures ahead of elections, eight were launched between May and June this year, CoinGecko said.
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“Meme coins are similar to non-fungible tokens in terms of being a small collectible. The idea is to monetize public attention,” said Yan Liberman, co-founder of crypto research firm Delphi Digital.
However, trading these tokens is easier said than done. Few, if any, are listed on the larger centralized exchanges like Coinbase or Binance. Most tokens trade in ether or solana pairs on smaller exchanges, each typically having a market value of less than $100 million and trading for fractions of a cent each.
QUESTIONABLE LEGITIMITY
Biden and Trump are neck and neck in national opinion polls. The presidential debate between the two candidates on Thursday will be a critical event five months before the Nov. 5 vote.
Traders at Polymarket, a cryptocurrency site where users place bets with stablecoins on future events, were betting on a 59% chance that Republican challenger Trump would unseat incumbent Democrat Joe Biden.
Political tokens bank on the popularity of political figures to gain traction, attracting retail investors with satirical or humorous names: “Fun is certainly a really big driving force that tokens are good for,” said Delphi Digital’s Liberman.
Trump has not said he endorses or supports any crypto tokens in his name. However, his criticism of Democrats’ attempts to regulate the industry has increased his popularity among these tokens, Liberman said.
The cryptocurrency industry at large is spending tens of millions of dollars ahead of the US elections to support pro-crypto candidates. Twin investors Tyler and Cameron Winklevoss donated $2 million in bitcoin to support Trump last week, but a report says the donation was refunded because it exceeded the maximum amount allowed by federal law.
Bitfinex analysts said: “These tokens have themselves turned into speculative assets in terms of election results.”
(Reporting by Medha Singh and Lisa Pauline Mattackal; Graphics by Sumanta Sen; Editing by Vidya Ranganathan and Pravin Char)