U.S. Election Results Will Determine the Future of Memecoins, Experts Say
A Columbia Business School professor says Trump’s victory could hurt the appeal of memecoins. The popularity of memecoins is not due to regulatory concerns, but to the broader supply of money, experts argue. With high interest in Solana and AI-themed coins in October, the market capitalization of memecoins remains strong.
While there is widespread consensus that Donald Trump’s win will benefit the cryptocurrency market compared to Kamala Harris’ win, the impact on the cryptocurrency sector is still being debated.
If Trump wins the election, a professor at Columbia Business School suggests that memecoins could face a downturn.
How Will the Election Results Affect Memecoins?
Investor interest in memecoins stems from frustration with the unfair tokenomics of venture-backed projects, according to Professor Omid Malekan.
If Trump wins, the Republican Party may relax certain policies. This could allow changes to token fees and dividends that would financially benefit token holders. This, in turn, could shift investor interest away from memecoins.
“Memecoins are simple and people like them because their initial distribution is fairer. But they have little utility or value. My point is that in a world where tokens with more utility are not regulated to death, memecoins are less attractive,” Omid Malekan explained.
As it may be recalled, in recent days Byron Donalds, a Republican congressman from Florida, revealed private conversations between him and U.S. presidential candidate Donald Trump. According to him, Trump plans to dismantle the “crypto regulatory blockade”:
“In short, President Trump is willing to do a cleanup… and it’s not just a cleanup, and then you don’t know what you’re going to do – there’s actually a systematic process to have people who are qualified, who have worked in our industries over time in the United States,” Fox Business reported, citing Donalds.
Furthermore, the rise of memecoins is partly a reaction to oppressive SEC regulations, as investor Nic Carter agrees with Professor Malekan. Under the leadership of Gary Gensler, Brendan Malone, Head of Policy at Paradigm, reported an increase in SEC litigation.
However, many industry experts are in disagreement with Malekan. Investor Murad argues that memecoins have nothing to do with politics, and that their growth is instead a result of an increase in the global money supply.
“Buyers of memecoins don’t even care about buying things with legitimate income and triggering fee changes. In fact, triggering fee changes accelerates the collapse of the altcoin complex, because no one comes to crypto because they want to trade stocks. Everyone comes to crypto to find parabolas. As the global money supply increases, the importance of attention will become more important than fundamentals and cash flows. This is a one-way street,” Murad commented.
Up from $104 trillion at the beginning of the year, the global M2 money supply is now over $107.1 trillion. Its annual growth rate is 7%, which is the highest it has been since December 2021.
Solana Labs co-founder Toly also disagrees with Malekan, offering a perspective that leans more toward the psychology of trading.
“Trading memecoins is entertainment. It’s a Keynesian beauty contest of what people find most entertaining. Trading anything else is work. If anything, people will want to work less,” Toly pointed out.
Memecoins market cap exceeded $56 billion and remained stable above $50 billion throughout October at the time of these discussions. With Bitcoin Dominance (BTC.D) reaching over 59.7%, investors continue to focus on Solana memecoins and AI memecoins.
By Audy Castaneda