A Donald Trump presidency might spell trouble for memecoins, according to Omid Malekan, a finance professor at Columbia Business School. In an October 26 post on X (formerly Twitter), Malekan suggested that memecoins thrive as a form of “economic populism” and could face challenges under Trump’s pro-crypto regulatory policies.
Memecoins and Economic Populism
Malekan views memecoins, which currently boast a $61 billion market cap according to CoinGecko, as a response to the “unfair” tokenomics of venture capital-backed cryptocurrencies. He argues that these tokens represent a form of protest against the more traditional and “grifty” structure of insider coins. In his post, Malekan added, “Regulatory sanity in America is bad for memecoins because it refocuses crypto on DApps and other things that actually matter, leading to a prolonged bear market where most people lose money on them.”
How Regulatory Changes Could Impact Memecoins
A potential Trump administration, especially with a broader Republican victory, might usher in a return of initial coin offerings (ICOs) and open token airdrops, which Malekan describes as “token sanity.” He claims that venture capital-backed tokens were largely pushed into the crypto space due to pressure from key figures like Senator Elizabeth Warren and SEC Chair Gary Gensler. With a change in regulatory direction, Malekan believes memecoins could lose their appeal as the focus of crypto shifts toward more practical decentralized applications (DApps).
Nic Carter, a partner at Castle Island Ventures, echoed Malekan’s sentiment, stating that memecoins have emerged partly as a reaction to the SEC’s stringent policies. Carter believes that if regulatory pressures ease under Trump, there may be less interest in speculative tokens like memecoins.
Opposing Views: Memecoins Not Tied to Politics
Not everyone agrees with Malekan’s theory. Memecoin enthusiast Murad Mahmudov dismissed the notion that memecoin popularity is tied to political or regulatory trends. According to Mahmudov, “99% of memecoin buyers couldn’t care less about politics.” He attributed the rise of memecoins to the increasing global money supply, which he argues will continue to fuel their popularity, regardless of who is in office.
Crypto trader Jordan Fish, also known as “Cobie,” weighed in, suggesting that people buy memecoins simply because of the potential for quick profits. Fish argued that many investors are drawn to memecoins since it’s becoming harder for regular buyers to invest in non-memecoin projects early, due to privileged access granted to insiders during token pre-sales. He believes that unless the SEC adopts policies that allow decentralized projects to raise funds through a more inclusive process, memecoins will remain attractive to retail traders.
Trump’s Pro-Crypto Rhetoric and Its Impact
Donald Trump’s stance on crypto has been a key part of his campaign. He has promised to make the U.S. a leader in crypto and Bitcoin, and even mentioned wanting “all the remaining Bitcoin” to be mined domestically. While these statements are somewhat vague, they have resonated with a portion of the crypto community.
A recent Coinbase poll showed that two-thirds of crypto owners in key swing states are inclined to vote for a candidate who supports the crypto industry. However, this support is split evenly between Trump and Democratic nominee Kamala Harris, who currently holds a slight lead in the polls.
