As a seasoned analyst with over two decades of experience navigating financial markets and observing various trends, I find myself intrigued by the ongoing debate surrounding the potential impact of a Donald Trump presidency on memecoins. From my vantage point, it appears that these digital assets have indeed served as a form of economic populism, challenging the status quo and questioning the tokenomics of venture-backed coins.
A U.S. presidency by Donald Trump might be unfavorable for memecoins, according to a finance professor, as these digital currencies have thrived as a symbol of resistance against perceived injustice.
In a recent post on October 26th, Adjunct Professor Omid Malekan from Columbia Business School stated that memecoins essentially represent economic empowerment for the people.
“They are a statement against the unfair (and often grifty) tokenomics of VC-backed and insider coins.”
Malekan stated, “The strict regulations in America are detrimental to memecoins as they shift the focus of cryptocurrency towards more substantial aspects such as Decentralized Applications (DApps), causing a prolonged period of market downturn where many investors lose money on these coins.
Memecoins have a $61 billion market capitalization, according to data from CoinGecko.
The professor contends that if the “Republican sweep” occurs, it could lead to a reintroduction of initial coin offerings, unrestricted token airdrops, and other “sane” forms of tokens in the crypto market. This is because venture capital-backed tokens have been predominantly pushed into the crypto sphere due to the influence of Senator Elizabeth Warren and SEC Chair Gary Gensler.
Castle Island Ventures partner Nic Carter endorsed Malekan by stating that memecoins, in many aspects, are a response to what he perceives as an “overbearing SEC regime.” He suggests that retail traders might not feel compelled to trade memecoins as frequently if the Securities and Exchange Commission (SEC) demonstrates more reasonableness in its regulations.
Lately, experts and commentators in the cryptocurrency field suggest that if Trump wins, the prices of alternative coins may surge to unprecedented levels as a result of increased market confidence due to his increasingly pro-cryptocurrency stance.
Additionally, there’s considerable disagreement about Malekan’s theory, as some contend that meme coin traders are not concerned with politics, and their widespread appeal seems unrelated to governmental policies.
Memecoin bull Murad Mahmudov disagreed and said that “99% of memecoin buyers couldn’t care less about politics.”
As an analyst, I’ve observed that the surge in popularity of memecoins is strongly linked with the continuous increase in the global money supply, a strategy intended to liberate funds for consumer spending and promote economic activity. I believe this trend will persist during Trump’s presidency.
Crypto trader Jordan Fish, also known as “Cobie,” pointed out that memecoins gain popularity because individuals seek investment opportunities in which the price can potentially increase.
“It is (almost) impossible for a normal person to buy a non-memecoin ‘early’ anymore.”
Fish noted that while the Securities and Exchange Commission (SEC) might have become more favorable towards cryptocurrency under Trump, many crypto users would still be hesitant to invest in non-meme coins listed on exchanges like Binance with significant market capitalizations. This is because, in these cases, others had the opportunity to purchase tokens during an earlier “exclusive access round.
Fish suggested that the significant change in SEC regulations would be to establish an exemption similar to crowdfunding, specifically tailored for decentralized token initiatives.
Trump has hinted at broad intentions regarding cryptocurrency regulations, suggesting that under his leadership, America could become a global leader in digital currencies such as Bitcoin. Additionally, he expressed interest in having all future Bitcoins mined within U.S. borders.
From my perspective as a researcher, it appears that his arguments in favor of cryptocurrency are resonating with some, specifically those inclined to support a pro-crypto candidate come election day.
A recent poll by Coinbase indicates that approximately 66% of cryptocurrency owners residing in key election states (Arizona, Michigan, Nevada, Pennsylvania, and Wisconsin) are inclined towards voting for candidates who advocate for the crypto sector.
In other words, among those who own cryptocurrencies, an equal number were leaning towards Trump and Kamala Harris as their preferred presidential candidate.
As the November 5th elections approach within eight days, Harris and Trump are almost neck-and-neck in the surveys, with Harris slightly ahead by approximately 1.5 percentage points, as per polls conducted by FiveThirtyEight on October 27th.
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2024-10-28 06:49