Experts anticipate that Donald Trump may have a more positive impact on the crypto market than Kamala Harris. However, there is some uncertainty about how this will affect the meme coin segment.
Omid Malekan, a professor at Columbia Business School, believes that Trump’s victory in the election could potentially lead to a negative impact on the meme coin sector. He pointed out that the increased interest in meme coins by investors is partially due to disappointment with the tokenomics of venture-backed projects. If Trump becomes president, it’s possible that the Republican Party may implement rule changes that would allow token holders to receive dividends and fees. This could result in reduced interest in meme coins.
Meme coins have emerged as a response to the strict policies of the U.S. Securities and Exchange Commission (SEC). Nic Carter, co-founder and general partner of Castle Island Ventures, stated that a softening of these policies under a Republican administration led by Trump could result in a downturn for meme coins. He made these comments in response to Malekan’s remarks and also called on the Solana project community to support the Democrats, who are represented in the presidential elections by Kamala Harris.
According to Malekan, meme coins represent economic populism and serve as a protest against traditional crypto assets and the involvement of venture investors. He argued that institutionally funded projects are a response to the “repressive policies” of SEC Chairman Gary Gensler and Senator Elizabeth Warren. A Republican victory could bolster the position of significant traditional crypto assets and introduce economic mechanisms to token holders that are absent in meme coins.
Malekan insisted that better regulation of the crypto sphere in the U.S. would be a “bearish” factor for meme coins. Carter supported this view, stating that a change in the SEC’s position could lead to decreased demand for meme coins, although speculative interests would ensure that they don’t completely disappear.
Opinions on these statements vary within the crypto community. Blogger and influencer Murad believes that the growth of meme coins is more due to economic factors than political ones, and the election results may not significantly impact this sector. Another popular blogger, Jordan Fish, known as Cobie, disagrees with Malekan and Carter, emphasizing that the interest of ordinary traders in meme coins remains high due to their inability to participate in large projects at early stages.
The meme coin sector has swiftly risen in the crypto industry, growing by over 1800% in 2024. Prior to the U.S. election, meme coins associated with Donald Trump have experienced a considerable increase in volume and price. Although this category represents a small capitalization compared to the overall meme coin market, they have captured the attention of the crypto community.
According to Forrest Przybysz, a trader and CEO of Sistine Research, meme coins’ popularity is based on attention cycles, and the more attention they receive, the higher their value will be. Yan Liberman, co-founder at crypto research firm Delphi Digital, highlighted that meme coins are like collectibles, allowing for the monetization of public attention.
The future of meme coins remains uncertain, as they are unlikely to have any practical utility or strategic importance for the development of the decentralized finance market. The crypto market is expected to experience volatility as the U.S. presidential elections approach, but the exact nature of this volatility is not entirely clear.