Trumps Impact on the Market A Closer Look

Donald Trump’s potential impact on the crypto market is a topic of much discussion among experts. Many believe that his influence will be more positive compared to Kamala Harris. However, when it comes to meme coins, the outcome is still uncertain.

Omid Malekan, a professor at Columbia Business School, argues that Trump’s success in the election could have a negative effect on the meme coin sector. He explains that investor interest in meme coins has grown due to disappointment in the tokenomics of venture-backed projects. If Trump becomes president, the Republican Party may make changes to regulations that allow token holders to benefit from dividends and fees. This could potentially reduce interest in meme coins.

Meme coins have emerged as a response to the strict policies of the U.S. Securities and Exchange Commission (SEC). Therefore, if these policies are eased under a Republican victory with Trump at the helm, it could lead to a decline in meme coins. Nic Carter, co-founder and general partner of Castle Island Ventures, supports this view and believes that the publication by Malekan is a call for the Solana community to support the Democrats, represented by Kamala Harris, in the presidential elections.

Malekan argues that meme coins represent economic populism and a protest against traditional crypto assets and venture investors. He suggests that institutionally funded projects are a response to the “repressive policies” of SEC Chairman Gary Gensler and Senator Elizabeth Warren. A Republican victory could strengthen traditional crypto assets by introducing economic mechanisms to token holders that are absent in meme coins.

Malekan emphasizes that better regulation in the U.S. crypto sphere will have a bearish effect on meme coins. Carter agrees with this view, stating that if the SEC’s position changes, the demand for meme coins will decrease, although speculative interests will still exist.

Opinions within the crypto community vary. Some, like blogger Murad, believe that the growth of meme coins is driven by economic factors rather than political ones, and the election results are unlikely to have a significant impact on this sector. Another popular blogger, Jordan Fish, known as Cobie, disagrees with Malekan and Carter, arguing that ordinary traders are still interested in meme coins because they cannot participate in large projects at the early stages.

The meme coin sector has experienced significant growth in the crypto industry, increasing by over 1800% since the beginning of the year. CoinGecko estimates the size of this sector at $1.2 billion, which represents 2.4% of the entire market. Despite its relatively small capitalization, meme coins have captured the attention of the crypto community.

Forrest Przybysz, a trader and CEO of Sistine Research, explains that meme coins gain popularity based on attention cycles. The more attention they receive, the higher their value becomes. Yan Liberman, co-founder at Delphi Digital, adds that meme coins function as collectibles, allowing for the monetization of public attention.

In conclusion, the impact of the U.S. presidential elections on the crypto market, particularly meme coins, remains uncertain. While a Trump victory may lead to positive developments in the overall cryptocurrency sector, the practical utility and strategic importance of meme coins for decentralized finance are still in question. The market can expect volatility as the election approaches, but the nature of this volatility is not yet clear.