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A Donald Trump-themed, MAGA memecoin (TRUMP) has surged more than 700% over the last month, according to CoinGecko data, reaching a market cap of almost $500 million.
“It’s evolved to become this kind of de facto betting market on the election for many investors,” Steven Steele, the project’s marketing director, told CoinDesk, noting that major events involving Trump have coincided with “a direct correspondence in the value of the coin.” Steele added that the MAGA coin project will track the election season, hypothetically gaining value if and when Trump gains momentum.
TRUMP, a coin on the Ethereum blockchain that traded at just $1.27 a month ago, is now almost $11.
While some see memecoins as the most deviant corner of crypto’s casino culture, others defend them as a type of respectful degeneracy, taking on the global finance system in an intentionally absurdist form. For instance, the Avalanche Foundation, an established future-proof blockchain, recently noted it would invest in these jokes-turned-commodities.
“My intention is really to have this up there with a DOGE or SHIB, that kind of scale and market cap and popularity,” Steele added.
The canine-themed memecoins began as practical jokes from online communities, but each now commands an 11-figure market cap, with DOGE and SHIB up 95% and 193% over the past week, respectively, riding Bitcoin’s tailwinds. Since SHIB started trading in 2020, its proponents have even launched Shibarium, its own blockchain.
Trending #ethereum coins [1h] #erc20
1 $SMCI 244
2 $TRUMP 149
3 $WOLF 80
4 $PIXEL 62
5 $NeonAI 52
6 $TWIF 46
7 $VAULT 28
8 $VIRTU 28
9 $INSP 27
10 $MEMES 25
11 $RENT 24
12 $TRUMPE 23
13 $NeonAI 20
14 $Kendu 19
15 $MAGIC 17Check @XtrendSOL for #solana pic.twitter.com/9nePAq91Ut
— Xtrend ETH (@XtrendETH) March 4, 2024
Steele envisions TRUMP as an early iteration of an experiment called PoliFi, which merges politics, finance, and community. That makes TRUMP coins quite similar to prediction markets, which allow a trader to sign a contract to hedge the likelihood of an event occuring. For instance, a contract regarding Trump’s chances of winning the November presidential election on the prediction market Polymarket has amassed over $6 million in liquidity, with some bets exceeding half-a-million dollars. In contrast, a bet about President Joe Biden’s odds of winning reelection has just under $4.5 million in liquidity. (These prediction markets, however, are often subjected to the same level of derision as memecoins due to the get-rich-quick gambling culture of some of the contacts, such as for the date of Taylor Swift’s potential pregnancy or John McAfee’s death.)
“Prediction markets do not offer the same return potential or profile as memecoins,” Steele told CoinDesk. “While it is possible to achieve 100x or 1,000x returns with memecoins like TRUMP, prediction markets are not liquid enough to generate nine-figure returns.”
However, the rival BIDEN memecoin has a market cap of just $22.49 million, arguably an indicator of both Biden’s pessimistic polling data or the crypto community leaning Republican.
But not all TRUMP investors are devout MAGA supporters. Some are just betting, as Trump fills arenas and remains in the headlines, that they can make a quick profit trading on his name.
Andrew Kang of the venture capital firm Mechanism Capital thinks investing in TRUMP hinges upon Trump’s media circus rather than his potential election win, according to a post on X.
“Meme coins are all about the attention economy,” Kang wrote, “and Trump is probably one of the best attention monopolizers in the world.”
Mechanism Capital has accumulated its first new positions of 2024. These new positions center around Trump and include Trump related meme coins and NFTs. Prolific usage of Trump sticker packs to start immediately.
Basic Thesis
Meme coins are all about the attention economy and… pic.twitter.com/AXLPMmBs4u
— Andrew Kang (@Rewkang) February 5, 2024
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