Most forecasts agree that Donald Trump's victory would be more favorable to the cryptocurrency market than Kamala Harris' victory, but the impact on the meme coin sector remains a subject of debate.
A professor at Columbia Business School suggests that if Trump wins the election, meme coins could decline.
How will the election result impact meme coins?
Professor Omid Malekan believes that investors are interested in meme coins due to their dissatisfaction with the unfair token economies of venture capital-backed projects. If Trump wins, the Republican party could relax some policies, enabling fee conversions and token dividends that provide economic benefits to token holders. This could divert investor attention away from meme coins.
"Meme coins are simple and people like them because the initial distribution is more fair. But they don't have much utility or value. I mean, in a world where coins with more utility don't get killed by regulation, meme coins become less appealing." – Omid Malekan explained.
Investor Nick Carter also agrees with Professor Malekan, stating that the rise of meme coins is partially a reaction to the SEC's oppressive regulations. Brendan Malone, policy lead at Paradigm, reported that legal actions by the SEC have increased under the leadership of Gary Gensler.
Read more: Who is Gary Gensler? Everything You Need to Know About the SEC Chair
However, many industry experts disagree with Malekan. Investor Murad argues that meme coins are not related to politics, and their growth is instead driven by the increase in global money supply.
"Meme coin buyers aren't interested in buying legitimate yield, and they're not interested in turning on fee conversions either. In fact, turning on fee conversions would actually accelerate the collapse of the altcoin complex. No one comes to crypto to trade stocks. Everyone comes to crypto to find parabolas. As global money supply increases, attention will increasingly dominate over fundamentals and cash flows. This is a one-way street." – Murad shared his views.
The global M2 money supply has now surpassed $107.1 trillion, up from $104 trillion at the start of the year. Its annual growth rate is 7%, the highest since December 2021.
Toli, the co-founder of Solana Labs, also disagrees with Malekan and provides a perspective more focused on trading psychology.
"Meme coin trading is entertainment. It's Keynes' beauty contest where people are looking for what they think others will find most entertaining. Trading everything else is work. People will want to do less work." – Toli shared his views.
Read more: 7 Hot Meme Coins and Altcoins Trending in 2024
As these discussions unfold, the market capitalization of the meme coin sector has surpassed $56 billion, maintaining above $50 billion throughout October.
Investors continue to focus on Solana meme coins and AI meme coins, while Bitcoin dominance (BTC.D) has surpassed 59.7%.
