Trump's potential presidency could trigger bearish trend for meme coins, expert warns
Trump's potential presidency could trigger bearish trend for meme coins, expert warns
A Trump presidency could spell trouble for the future of meme coins, according to Omid Malekan, a finance professor at Columbia Business School.
According to Cointelegraph, memcoins currently have a market capitalization of $61 billion. Malekan suggests that meme coins thrive as a form of economic populism, representing anti-establishment sentiment among retail investors. However, the return of Donald Trump to power may shift the political narrative, diminishing the appeal of meme coins and potentially triggering a bearish trend.
Meme coins, including Dogecoin and Shiba Inu, have gained popularity by resonating with online communities and symbolizing a rejection of traditional financial systems. These tokens, often traded more for their cultural significance than for utility, could face headwinds if Trump’s presidency reduces the sense of economic frustration that has fueled their rise. "Meme coins act as a statement against perceived injustices," Malekan said, emphasizing their connection to populist ideals.
Malekan explained, “Sensible regulation in America is bad for memcoins because it refocuses the cryptocurrency on DApps and other really important things, leading to a prolonged bear market where most people lose money on them.”
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Malekan argues that Trump’s campaign aligns more closely with populist movements that channel frustration into political change, potentially redirecting some of the energy currently supporting meme coin markets. A shift in focus from financial resistance to political engagement could see investors pulling out of meme coins, leading to declining prices and diminished market sentiment.
The timing of Trump’s rise is significant, as meme coins are already facing challenges, including market saturation and tightening regulatory scrutiny. Recent volatility in meme coin prices has raised concerns about their long-term sustainability, and a shift in public interest could add further pressure.
Analysts will be closely watching how political developments and Trump’s campaign strategy impact the broader cryptocurrency market. Should the energy behind meme coins dissipate, it could mark the beginning of a new phase in retail investor behavior. At the same time, meme coin communities may need to adapt their messaging to remain relevant in a shifting political and economic landscape.
Recall, we previously reported that the long-awaited token sale of World Liberty Financial (WLFI), a cryptocurrency project backed by Donald Trump, failed to attract significant investor interest.
Read also: Analyst Michaël van de Poppe predicts extended Bitcoin bull market to 2026
