In recent years, tokens and NFTs (Non-Fungible Tokens) inspired by former President Donald Trump have experienced a significant surge in popularity. The influence of the former president on the world of cryptocurrency trading has been notable since 2020, as data reveals a substantial increase in related trading volumes. Prominent crypto fund Mechanism Capital has made a bold move by placing its bets on tokens and NFTs that revolve around Donald Trump. As the U.S. elections approach, the media presence of the former president is expected to drive the value of these meme coins even higher, irrespective of the election outcome, according to the crypto fund.
Over the past 24 hours, numerous Donald Trump-themed tokens, spanning across Ethereum, Solana, and other blockchain networks, have witnessed a remarkable surge in value, with some experiencing gains of up to 100%. Mechanism Capital has announced that these Trump-themed tokens constitute its first investment positions for 2024. Andrew Kang, the founder of Mechanism Capital, expressed the fund’s enthusiasm, stating, “Mechanism Capital has accumulated its first new positions of 2024, focusing primarily on Trump-related meme coins and NFTs. We anticipate a widespread adoption of Trump-themed sticker packs.”
These positions reflect a strategic bet on the upcoming news cycles and increased attention surrounding Donald Trump in the lead-up to the U.S. Presidential elections. Meme tokens, known for their ability to capitalize on hype and trends, are the chosen avenue for potential profits in this venture. Kang emphasized that this investment isn’t solely dependent on Trump’s election outcome, as Trump’s strategy revolves around provocation and delivering attention-grabbing statements that resonate with the public. Mechanism Capital’s specific bet is centered on a TRUMP meme coin offered by @MAGAmemecoin, boasting a market capitalization exceeding $90 million and $3.3 million in trading volumes over the past 24 hours, as per DEXTools data.
Interestingly, a crypto wallet associated with Trump, as indicated by the on-chain platform Arkham, holds over $1 million worth of these TRUMP tokens. While the wallet initially received $7,100 of TRUMP tokens from the meme coin’s developers between August and October of the previous year, its value grew significantly as it became a proxy bet on Trump’s political campaign. DEXTool data reveals that several other Trump meme tokens also experienced notable value increases within the past 24 hours, with some even surging by as much as 100%. However, it’s important to note that these tokens’ issuance, including the TRUMP token, is unrelated to the former U.S. President directly.
One of the remarkable aspects of blockchain technology is its democratization, allowing virtually anyone to call a smart contract and issue tokens on Ethereum or other blockchain platforms for minimal costs. The existence of decentralized exchanges further facilitates the rapid issuance, liquidity provisioning, and trading of tokens.
Meme coins, despite not functioning as prediction markets, have gained traction as a unique tool for speculating on future events. Tokens associated with the former president have become a significant driver of trading volumes within this space. During the 2020 election, FTX introduced a perpetual contract market, mirroring its crypto derivatives markets, where investors could bet on the election outcome. The TRUMP and BIDEN tokens generated a combined volume of nearly $4 million in the lead-up to the election, with more than $2 million traded following the announcement of Trump’s COVID-19 diagnosis.
At Polymarket, a contract predicting the outcome of the 2024 presidential election has garnered over $37 million in volume. Notably, $4 million has been wagered on the possibility of a Trump presidency, while $3 million has been staked on Biden. The current market sentiment gives Trump a 53% chance of victory, with Biden holding a 36% chance. Additionally, there are wildcard bets on figures like Michelle Obama and Gavin Newsom, although these remain speculative with no credible evidence to suggest their candidacy as Democrats’ replacements for Biden.
