Although most predictions agree that a Donald Trump victory would help the crypto market more than a Kamala Harris victory, the impact on the coin industry remains a matter of debate.
A Columbia Business School professor suggests that meme coins could see a slowdown if Trump wins the election.
How will the election results affect Meme Coins?
Professor Omid Malekan believes investor interest in meme coins comes from frustration with injustice tokenomics of projects supported by venture capitalists. If Trump wins, the Republican Party could relax certain policiesallowing fee switches and token dividends to economically benefit token holders. This, in turn, could divert investor interest away from meme coins.
“Meme Coins are simple and people like them because their initial distribution is more equitable. But they have little benefit or value. My point is that in a world where coins that have more utility aren’t regulated to death, meme coins are less appealing. –Omid Malekan explain.
Additionally, investor Nic Carter agrees with Professor Malekan stating that the rise of meme coins is in part a reaction to oppressive SEC regulations. Brendan Malone, head of policy at Paradigm, reported a slight increase in SEC lawsuits under the leadership of Gary Gensler.
Learn more: Who is Gary Gensler? Everything you need to know about the president of the SEC
However, many industry experts disagree with Malekan. Analyst Murad claims that meme coins have nothing to do with politics and that their growth is instead driven by the increase in the global money supply.
“Coin buyers don’t even bother buying things with legitimate income and flipping the fee switches. In fact, activating fee switches accelerates the collapse of the altcoin complex, because no one turns to crypto because they want to trade stocks. Everyone comes to crypto to find parabolas. As the global money supply increases, the emphasis will increasingly be on fundamentals and cash flow. This road only goes one way. – Mourad commented.
The global M2 money supply has now exceeded $107.1 trillion, up from $104 trillion at the start of the year. Its one-year growth rate is 7%, the highest since December 2021.
Solana Labs co-founder Toly also disagrees with Malekan, offering a perspective that leans more on psychology of trading.
“Trading meme coins is entertainment. It’s a Keynesian beauty contest to determine what people will find most amusing. Swapping everything else is work. On the contrary, people will want to do less work. –Toly commented.
Learn more: 7 Hot Meme Coins and Altcoins Trending in 2024
At the time of these discussions, the market capitalization of meme coins exceeded $56 billion, maintaining stability above $50 billion throughout October.
Investors continue to focus on Solana meme parts And AI Meme Coins as Bitcoin Dominance (BTC.D) reached more than 59.7%.
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