On July 13, when news broke that a potential assassin had narrowly missed Donald Trump at a rally in Butler, Pennsylvania, a trading frenzy erupted. Within an hour of the shooting, the price of TRUMP, a cryptocurrency inspired by the former president, jumped by more than a thirdfrom $6.34 to $8.69. Memecoin was essentially a proxy for the upcoming US elections.
Dozens of political memecoins have been created over the past year, and there are also coins based on eminent politicians, such as Joe Biden, Kamala Harris, Robert F. Kennedy Jr., and Alexandria Ocasio-Cortez. They share a common iconography and naming convention: Politicians are usually represented by unflattering caricatures and their names are intentionally misspelled (instead of Joe Biden it is “I ate Boden“), in tribute to influential comic meme from the 2010s.
Beyond financial speculation, these coins serve no purpose and promise no utility, but during the US presidential election campaign, their market performance correlated with the political successes of the individuals they depict.
As TRUMP’s stock price rose after the failed coup attempt, an event that commentators noted, Planned would strengthen his chances for re-election, the price of the KAMA coin with the Harris motif, more than three times after Joe Biden announced his withdrawal from the race, paving the way for the vice president to become the Democratic nominee. Similarly, on June 27, the day of Biden’s disastrous performance in the CNN debate, BODEN’s price dropped by half.
In the United States, the financial regulator is the Commodities and Futures Trading Commission (CFTC). he refused permission gambling platforms offering bets on election outcomes. Under many states, such bets are also explicitly illegal. But buying political memcoins has become a loose substitute — one that comes with the wild price swings typical of cryptocurrency markets, with increased risk and potential reward. Total worth hundreds of millions of dollars political memcoins are currently changing owners every day.
“Investing in a political memecoin is not an endorsement or a sign of endorsement,” says Rennick Palley, a founding partner at investment firm Stratos, whose hedge fund has memecoins in its portfolio. “Most people treat it as a fun way to bet on what’s going to happen. If I wanted to speculate on who would win, memecoins are clearly the way to do it with maximum risk and maximum upside.”
The debate over legalizing election betting in the US goes back decadesbut it is currently playing out in the US judicial system. In September, the CFTC the application was rejected by Kalshi, a Up-to-date York-based company that runs a live event betting market to allow customers to bet on which party will control both houses of Congress, a move the regulator described as “contrary to the public interest.”