Trump win, ‘regulatory sanity’ is bad news for memecoins: Professor

A presidency under Donald Trump could negatively impact memecoins. These cryptocurrencies have thrived as symbols of resistance against perceived injustices, according to a finance professor.

“Memecoins themselves are a form of economic populism,” Omid Malekan, an adjunct professor at Columbia Business School, said in an Oct. 26 X post, adding:

“They are a statement against the unfair (and often grifty) tokenomics of VC-backed and insider coins.”

 

“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,” Malekan added.

Memecoins have a $61 billion market capitalization, according to data from CoinGecko.

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The professor said a “Republican sweep” would bring back initial coin offerings, fully open token airdrops and “other kings of token sanity” after venture capital-backed tokens were “forced upon” the crypto space due to pressure from Senator Elizabeth Warren and Securities and Exchange Commission Chair Gary Gensler.

Castle Island Ventures partner Nic Carter agreed with Malekan, saying on X that memecoins are “in large part” a reaction to an “oppressive SEC regime,” and retail traders would have less need to trade memecoins if the agency “finds sanity.”

More recently, some crypto commentators and analysts have predicted a Trump win could send the price of altcoins to new highs from renewed market optimism due to his now staunchly pro-crypto policy promises. 

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There’s also strong opposition to Malekan’s theory, with some arguing that memecoin traders aren’t interested in politics and their popularity has little to do with government policies.

Memecoin bull Murad Mahmudov was one who disagreed, saying that “99% of memecoin buyers couldn’t care less about politics.”

Mahmudov claimed the popularity of memecoins is closely tied to the “persistently rising global money supply” — which aims to free up money to consumers to stimulate spending — which he said won’t stop under Trump.

Crypto trader Jordan Fish — who goes by “Cobie” — said memecoins are popular “because people want to buy things where the price can go up.”

“It is (almost) impossible for a normal person to buy a non-memecoin ‘early’ anymore.”

 

Fish said that even if the SEC under Trump became more crypto-friendly, many crypto users wouldn’t buy into non-memecoins listed on exchanges like Binance with high market capitalizations where others were able to buy tokens in an earlier “privileged access round.”

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“The only SEC pivot that would matter would be creating a crowdfunding-type exemption for decentralized token projects,” Fish said.

Trump has made vague campaign promises about crypto regulation, saying he would make “America the world capital of crypto and Bitcoin” and that he wanted “all the remaining Bitcoin” to be made in the US.

His rhetoric on crypto seems to have paid off, at least for the limited numbers who will vote for a pro-crypto candidate.

A Coinbase poll released last month shows that two in three crypto owners in the swing states of Arizona, Michigan, Nevada, Pennsylvania and Wisconsin were keen to vote for a crypto industry-supporting candidate.

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However, the support of crypto-owning voters was evenly split between Trump and Democratic presidential nominee Kamala Harris.

With eight days until the Nov. 5 elections, Harris and Trump are nearly equal in the polls, with the former having a slight 1.5 percentage point lead, according to FiveThirtyEight polls from Oct. 27.

source: cointelegraph