Author: David Canellis, Blockworks; Translated by: Tao Zhu, Golden Finance

Political memecoin — PolitiFi — had a bit of a splash in the first half of the year. But it has been on the back burner since then.

The combined market capitalization of the five most well-known tokens, MAGA (TRUMP), MAGA Hat (MAGA), Doland Tremp (TREMP), Jeo Boden (BODEN), and Kamala Horris (KAMA), peaked at over $1.25 billion in early June.

They are now worth less than $170 million, a drop of nearly 90%.

The remnants of ConstitutionDAO, which lost an auction in late 2021 to Citadel CEO Ken Griffin for a rare first copy of the U.S. Constitution, now make up almost two-thirds of the entire PolitiFi market, according to CoinGecko. Whether it really should be ranked alongside political parody memecoins and the like, though, is debatable.

This time last year, PolitiFi didn’t even exist. This election season is its big moment, with the largest Trump memecoin set to launch in August 2023 — just as Bitcoin prepares for its massive rally.

ETH has underperformed the S&P 500 over the past 14 months

Bitcoin’s bull run between October and March did provide cover for PolitiFi. The chart above plots the market capitalization of the top five political memecoins (the faded area behind) against the performance of Bitcoin (orange line), Ethereum (purple line), and the S&P 500 (blue line).

You can see that PolitiFi has largely mirrored ETH’s price action during this period — the purple line follows the shape of PolitiFi’s market cap — while Bitcoin has performed better, at least for now.

Is PolitiFi over? Probably not. But considering Kamala Harris-themed memecoins haven’t performed any better than Trump memecoins, that’s telling.

A simple reason for the decline of this particular type of memecoin could be that there are no new interested holders entering its market, whose liquidity could outweigh the sellers and push the price higher.

MAGA holders are spread across four different blockchains, with about three-quarters on Ethereum and Solana

This chart zooms in on the market cap of the largest Trump memecoin (shown as the orange line) and maps it against the change in the number of new holders.

Note that the points in Trump’s narrative dovetail directly with the influx of new holders.

Thousands of addresses put MAGA (TRUMP) in their bags around the Supreme Court’s election voting ruling, Trump’s “hush money” guilty verdict, and the July assassination attempt.

There has been no such luck since, with just 424 new holders as of Friday morning after Tuesday’s debate with Harris. Meanwhile, Polymarket’s odds on a Trump win in November have dropped to 49% from 52%.

All in all, of the 80,190 addresses holding MAGA (TRUMP), about 30% (24,300) bought the token after it hit an all-time high of $17.51 ​​in early June. After losing nine-tenths of its value, it currently trades at $2.25.

Of course, 80% drops are one of crypto’s oldest traditions. But if there was ever a time for Trump headlines to reinvigorate PolitiFi, now is it.