Donald Trump has taken a commanding lead over Joe Biden - in the world of political meme coins, at least.
Crypto tokens linked to former President Trump have leapt in volume and value in recent weeks as the November U.S. presidential election heaves into view and the arch-rivals prepare for their first public debate.
The universe of the so-called "PolitiFi" tokens is tiny, with a combined market value of about $1 billion. A majority of those are linked to Trump, who has presented himself as a champion for cryptocurrency although he hasn't offered specifics on his proposed crypto policy.
Of the top 10 political meme coins by market value, seven are based on Trump, with many playing on Trump's Make America Great Again slogan, such as MAGA and MAGA Hat, according to crypto platform CoinGecko, while only one - Jeo Boden - is related to President Biden, CoinGecko data shows.
The largest token linked to a political figure, MAGA, trades under a ticker called TRUMP on exchanges and was launched in late August 2023. Its market value has leapt as high as $775 million in June from nearly nothing at the start of the year.
By comparison, Jeo Boden, which launched in March this year, jumped to as much as $648 million days after its launch before gradually sliding to $87 million.
Forrest Przybysz, a cryptocurrency trader and CEO of Sistine Research, says meme coins by their nature are not only highly speculative but also driven by attention cycles.
"The more attention a token can hold and maintain, usually the higher it's price will go ... he added. "Trump is an attention magnet. Therefore he is the ideal subject for a meme token."
"We should expect price and speculation on a Trump-based meme token to rise as we get closer to the election."
Political tokens are a fraction of the $46 billion market value of meme coins - hyper-speculative, volatile and risky cryptocurrencies often driven by internet jokes - which are themselves a niche segment of the broader $2.3 trillion cryptocurrencies, per Coingecko estimates.
The origins of some of the tokens are obscure and debated on social media by traders wary of a "rug pull", where investors deposit money in phony projects only to find the coin's developers have vanished with the money.
Of the top 10 biggest political tokens, which typically aim to capitalize on the increased attention on political figures ahead of elections, eight were launched between May and June this year, CoinGecko said.
"Meme coins are similar to nonfungible tokens in terms of being a bit of collectors' item. The idea is that you monetize public attention," said Yan Liberman, co-founder at crypto research firm Delphi Digital.
However, trading these tokens is easier said than done. Few, if any, are listed on the biggest centralized exchanges such as Coinbase or Binance. Most of the tokens are traded in ether or solana pairs on smaller exchanges, each typically have a market value of below $100 million and trade for fractions of a cent apiece.
QUESTIONABLE LEGITIMACY
Biden and Trump are neck-and-neck in national opinion polls. A presidential debate between the two candidates on Thursday will be a critical event five months before the Nov. 5 vote.
Traders on Polymarket, a crypto site where users place bets with stablecoins on future events, were betting on a 59% chance that Republican challenger Trump would unseat Democratic incumbent Joe Biden.
Political tokens bank on the popularity of political figures to gain traction, enticing retail investors with satirical or humorous names: "Funny is certainly an authentic big driving force of which tokens do well," said Delphi Digital's Liberman .
Trump hasn't said he endorses or backs any crypto token in his name. However, his slamming of Democrats' attempts to regulate the sector has boosted his popularity among these tokens, Liberman said.
The broader crypto industry is spending tens of millions of dollars ahead of the U.S. election to boost crypto-friendly candidates. Investor twins Tyler and Cameron Winklevoss donated $2 million in bitcoin to support Trump last week but a report said the donation was refunded as it exceeded the maximum amount allowed under federal law.
Analysts at Bitfinex said: "These tokens have turned into speculative assets themselves in terms of the election results."
