In this photo illustration, Elon Musk’s Twitter account appears on a mobile phone screen with a Dogecoin logo in the background.
Adreès Abbas | Light flare | Getty Images
Memecoins surged on Wednesday as former president Donald Trump won a second term.
Dogecoin jumped more than 15% and Shiba Inu gained 6%, according to Coin Metrics. The movements came in the form of bitcoin hit a new high above $76,000.
NBC News projects that Trump will defeat his Democratic rival, vice-president Kamala Harrisafter winning 276 electoral college votes, including some key states.
“While crypto markets are experiencing low volatility in the run-up to the election as the industry seeks clarity on future regulatory conditions, traders are bracing for volatility once results begin to be released,” a said Chris Chung, CEO of Titan, a decentralized company. exchange aggregator built on the Solana blockchain. “Some sectors that have supported prices, such as renewed interest in memecoins, could see significant price movements as individual states release election results.”
As Election Day Approaches, Memecoins and AI-Linked Crypto Tokens outperformed the overall crypto market. The crypto market sector is used as a measure of the risk appetite of retail investors.
An acceleration in memecoin activity is a sign that retail investors are participating and eager to speculate much further down the risk curve, Ryan Rasmussen, head of research at Bitwise Asset Management, told CNBC.
“Given that memecoins have a low market cap and liquidity, I’m not surprised to see them skyrocketing alongside the broader crypto rally,” he said. “If crypto sells off, I would expect the same outsized move in memecoins to the downside.”
“I urge long-term investors not to overemphasize the memecoin activity,” he said. “In the long term, there will be very few winners in the memecoin market, and with thousands of coins being launched daily, choosing a specific memecoin is like buying a lotto ticket.”
The president-elect is seen as the most favorable candidate for the broader crypto market beyond bitcoin, as he has promised a more cryptocurrency-friendly Securities and Exchange Commission if elected to another term.
“Trump has been widely seen as extremely positive for cryptocurrency markets, and any indication of a possible victory will likely drive prices up extremely quickly in anticipation of an influx of deployed capital,” Chung said.
“Dogecoin in particular could also rally” to the very real prospects that Elon Musk (a long-time Dogecoin supporter) could be named to head the Department of Government Efficiency in a Trump admin,” said Nic Puckrin, co-founder and CEO of crypto education platform Coin Bureau.
This refers to remarks Trump made in September, when he announced he would nominate Tesla’s CEO. to a “governmental efficiency commission”. Musk, who has dubbed himself the “Dogefather” in the past and is known for making public comments about memecoin that influence its price, has since on his social media platform ‘governmental efficiency’. or “DOGE”