Political memecoins are cryptocurrencies based on political figures or messages, such as former US President Donald Trump’s MAGAcoin, South Korea’s JAECOIN, and Canada’s TRUDEAUcoin, and have become a new trend in the cryptocurrency market. While these meme coins are exciting for investors and have succeeded in attracting public attention through social media and community, they suffer from a structural problem of being overly dependent on the words and actions of politicians.
MAGAcoin, for example, has seen its price rise and fall in response to comments and political events from former President Trump. It surged 600% in a single day on the day Trump declared that he would be “the crypto president,” only to plummet more than 70% after his conviction in a sex scandal trial, causing investors to lose a lot of money. “The market doesn’t make sense that Trump’s words dictate the value of my coin,” one investor wrote angrily.
In South Korea, JAECOIN, a cryptocurrency inspired by candidate Lee Jae-myung, is also a hot topic. Candidate Lee Jae-myung has emphasized the importance of blockchain technology, stating that “cryptocurrency is a key asset for the future economy,” and political meme coins like JAECOIN have been mentioned several times. However, JAECOIN has not yet been officially issued, and it remains to be seen how the coin will fare between political messaging and speculative frenzy.
The problem with political memecoins is that their prices rise and fall based on what politicians say and do, not on their technical value or market demand. This undermines the inherent trust in cryptocurrencies and maximizes the speculative nature of the market. Experts point out that while political memes can be fun for investors in the short term, they are inherently speculative and unstable.
In the end, political memecoins are likely to be a short-term fad. Relying solely on public sentiment and political events without a technical foundation, they undermine market trust and are unlikely to be viable in the long term. This anomalous market structure, in which politicians’ statements drive economic value, remains a challenge for the cryptocurrency market to address.
