Memecoins are becoming a new trend, reshaping the intersection of finance and politics. As the 2024 US presidential election approaches, political Memecoins have garnered widespread attention.
These digital assets, inspired by well-known political figures, have become a novel way for tech-savvy individuals to speculate on election outcomes.
On July 13th, when news of an assassination attempt on Donald Trump broke, a trading frenzy ensued. The price of the Memecoin inspired by the former president—TRUMP—soared by more than a third within an hour.
This incident highlighted the potential of Memecoins as indicators of political events.
Political Memecoins are often characterized by unflattering cartoons and deliberately misspelled names of political figures, and have surged over the past year. Despite having no use other than financial speculation, their market performance has shown a correlation with the political fortunes of the figures they represent.
For example, when Joe Biden announced his withdrawal from the race, the price of the Memecoin themed after Vice President Kamala Harris—KAMA—tripled. This event paved the way for Harris to become the Democratic candidate, and the Memecoin market reacted accordingly.
As election fever heats up, the popularity of Memecoins surges
In the US, betting on election outcomes is illegal, and the Commodity Futures Trading Commission (CFTC) refuses to allow betting platforms to offer such bets. However, political Memecoins have become a loose proxy for election betting, offering higher risks and potential returns due to the volatility of the crypto market.
Investing in political Memecoins is not an endorsement, but a fun way to speculate on election outcomes. This sentiment reflects a generational shift in attitudes towards political speculation, with younger generations preferring Memecoins over traditional betting.
The debate over the legalization of election betting in the US continues, with a New York-based event betting market company, Kalshi, engaged in legal proceedings with the CFTC. As this legal dispute continues, political Memecoins fill the void, offering a new form of cultural expression that reflects the ongoing political drama.
The rise of Memecoins represents a passing of the baton between political generations. As the 2024 US presidential election approaches, it will be interesting to observe how this new form of political speculation evolves and impacts the worlds of finance and politics.
