Since the Bitcoin halving, the crypto market has continued to be sluggish and the market has been in a state of consolidation. On May 16, the price of Bitcoin briefly surged and broke through $66,000. As of press time, Bitcoin has fallen back to around $65,000, currently at $65,158.9, a 1.29% drop in 24 hours. According to Coinglass data, in the past 24 hours, more than 50,000 people were liquidated, with a total liquidation amount of $120 million.
Compared with the tepid performance of Bitcoin, the meme coin sector has emerged in recent days with a significant rise. According to Coingecko data, the market value of the meme coin category has exceeded US$57 billion, with a daily increase of 9.3%. Among them, the meme sector related to the US election and the meme coins related to the "King of US Retail Investors" have particularly prominent growth. Trump concept coin TRUMP has continued to rise recently, breaking through US$10, with a 24-hour increase of 29.7%.
"Meme coins lacking actual support may have price bubbles, and once market sentiment changes, prices may fall rapidly." Gao Zelong, digital economist and deputy director of the Beijing Consensus Blockchain Research Institute, told the China Times that the price of meme coins is easily affected by speculation, market sentiment and breaking news events, and is highly volatile. In addition, with the attention of regulators, meme coins may face the risk of stricter supervision or even a ban on trading.
Trump turns supportive of cryptocurrencies
Recently, at an NFT event held in Florida, the United States, former US President Trump claimed to support cryptocurrency and promised to accept cryptocurrency donations. At the same time, Trump also promoted his own NFT at the event and called himself an advocate of cryptocurrency, which is very different from his previous attitude of criticizing cryptocurrency.
In 2019, Trump lashed out at Bitcoin. He publicly stated on social media: "I am not a fan of Bitcoin and other cryptocurrencies. Cryptocurrencies are not currencies, and their values fluctuate greatly. They have no physical objects, come out of thin air, and are unregulated. These factors allow cryptocurrencies to be used for illegal activities, including drug trafficking and other illegal activities." In 2021, Trump reiterated his personal opinion, saying that "Bitcoin looks like a scam. I don't like it because it is another currency that competes with the US dollar."
"Against the current political and economic backdrop, Trump's public support for cryptocurrencies is particularly striking." Yu Jianing, president of UWEB and co-chairman of the Blockchain Committee of the China Communications Industry Association, told the China Times that this statement highlights the growing social recognition and influence of cryptocurrencies, and may indicate that acceptance and support for this emerging asset class in the political arena is on the rise.
Yu Jianing further analyzed that Trump's support for cryptocurrencies, while to some extent enhancing the legitimacy and public awareness of this asset class, will also raise concerns about conflicts of interest and market manipulation. Politicians' endorsements of specific financial assets may have an impact on investor decisions, which requires regulators to remain vigilant and ensure market fairness and transparency. However, despite the controversy, this incident has undoubtedly opened up new possibilities for the mainstreaming of cryptocurrencies and further financial innovation.
Regarding Trump's change of attitude, Ron Hammond, director of government relations at the U.S. Blockchain Association, believes that there is little political risk in Trump's involvement in the cryptocurrency field, but it will bring great benefits given that both parties won the election victories in crypto assets in the primaries. This positions crypto assets as a unique issue that can influence the demographic structure of voters, especially young voters who have shown a continued interest in digital asset technology.
"As a former US president, Trump's words and deeds have a certain influence on the market." Gao Zelong believes that his public support for cryptocurrencies may reflect his personal interest in this emerging asset class, or it may be a political strategy to attract voters interested in cryptocurrencies. From a broader perspective, this statement may mean that cryptocurrencies are gradually gaining recognition at the mainstream political level. This support may increase the social acceptance of cryptocurrencies, but it may also bring more regulatory attention.
Standard Chartered Bank said in a recent research report that as the Federal Reserve monetizes government debt, the risk of U.S. fiscal dominance is increasing, and investors are looking for alternative assets, which is expected to support the trend of cryptocurrencies. In addition, Trump may also become a positive factor for cryptocurrencies.
Standard Chartered Bank said that through a more favorable regulatory environment, Trump's second term will have a positive impact on cryptocurrencies. The bank believes that in addition to the passive boost to Bitcoin from de-dollarization, Trump's second administration is expected to actively support Bitcoin by relaxing regulations and approving U.S. spot ETFs.
Trump concept currency takes off
Under the influence of Trump's remarks, the price of Trump-themed meme coin MAGA (TRUMP) soared, leading a number of election-related tokens to rise.
According to Dexscreener data, among the meme coins related to the presidential election, Trump's eponymous token TRUMP ranks first, with a market value of $350 million, and its daily trading volume once surged 620% to $281.8 million. Biden's related token BODEN ranks second, with a market value of about $215 million, and Trump's related token TREMP ranks third, with a market value of about $580 billion.
In addition, according to data from NFT Floor, Trump Digital Trading Cards minted on Polygon have risen by 120%. It is reported that Trump currently holds $1.65 million worth of cryptocurrency, of which more than 90% are ETH and WETH. These holdings are all from the proceeds of NFT sales, not active investments. According to the official website, Trump cards are not owned, managed or controlled by Trump, but by NFT INT LLC. Trump licensed his image to this company, which paid a portion of the profits to a company owned by Trump.
In this regard, Li Yongmei, deputy secretary-general of the Nankai Financial Chief Economist Forum and founder and CEO of Yueheng Consulting, told a reporter from the China Times that the sharp rise of Trump-themed meme coins reflects the huge role of celebrity effect and market sentiment in the cryptocurrency market. This surge often lacks fundamental support and is highly dependent on short-term speculative behavior, which is extremely risky. Investors should be wary of the volatility of such assets and understand the reality that there is no real value support behind them. Investing in similar meme coins requires careful evaluation and good risk management to avoid suffering heavy losses due to blindly following the trend.
It is worth noting that the role of cryptocurrency in the US election is becoming increasingly prominent. According to the latest report from the US consumer rights advocacy organization Public Citizen, which details the scale of donations in the cryptocurrency field, the report shows that super PACs related to digital assets have raised more than $102 million in the 2024 election, of which more than half of the funds came from Coinbase and Ripple Labs, ranking third among all super PACs.
In addition, according to an online survey of more than 1,000 voters in each state commissioned by DCG in early April by Harris Poll, cryptocurrencies have a say in several key swing states such as Arizona, Michigan, Montana, Nevada, Ohio and Pennsylvania, and more than 90% of voters who support cryptocurrencies plan to vote in the upcoming election. Data shows that about 18% of voters in these states (about 3.4 million people) hold digital assets.
"This year's general election and the rise and fall of the currency circle show a very significant consistency in the data." Chen Jia, an independent international strategy researcher, told the China Times reporter that the Trump team not only seeks to ensure that Bitcoin can be used for his campaign Donations should be made through Bitcoin and even the currency circle, a hot and controversial topic in the United States, to win over the base of cryptocurrency supporters as much as possible.
In Chen Jia's view, the US election is only a disturbance to cryptocurrency, and it is not enough to change the development trend of cryptocurrency. Facts have proved that the sovereign currency system is incompatible with the cryptocurrency system. In the end, the cryptocurrency system succumbed, gave up decentralization, and turned to centralized authentication. The current US currency circle has gradually become part of the US dollar system.
Chen Jia said that with the high development of single Bitcoin transaction segmentation technology, real-time transactions of one millionth of a Bitcoin are easy to do on the exchange, and the possibility of Bitcoin inflation in the future has begun to emerge. In addition, cryptocurrencies are only "encrypted" in name only, and the technical backdoors and theft risks of their tokens have never been completely eliminated. At the same time, illegal transactions and money laundering of Bitcoin in the global dark web are quite rampant. It is a long way to go for Bitcoin to become a mainstream configurable asset.
Meme coins are back in fashion
Recently, the popularity of meme coins is not only due to the Trump concept. With the high-profile return of the "King of US retail investors" Roaring Kitty (real name Keith Gill), the comment section of Roaring Kitty is filled with various "calls" for meme coins, and the prices of related tokens have also skyrocketed.
On March 31, the token KITTY, which is the same name as Roaring Kitty, was launched on Solana. The next day after the launch, it fell by more than 90%, almost to zero, but unexpectedly gained a big increase due to the return of Roaring Kitty. Within 24 hours after the news was released, the KITTY token soared more than 74 times, with a market value of 10 million US dollars at one point, and a 24-hour trading volume of more than 15 million US dollars.
In addition, multiple "GME" tokens with the same name have become active again. GME, which was launched on Solana in February this year, gained 815% in a day three months after returning to zero, and the increase was close to 1000% in 7 days. GME, which was launched on Ethereum just 5 hours after the news of Roaring Kitty's return, gained more than 1000%. There is also a meme coin with the same name GME on the Base chain, which has a single-day increase of 780%.
But it is worth noting that GME on the Solana chain quickly plummeted after its surge. In the past 24 hours, the token has fallen by 30.53%.
A16Z's Chief Technology Officer Eddy Lazzarin expressed concerns about the far-reaching impact that the meme coin market may have. He pointed out that the rise of meme coins has changed the public, regulators, and entrepreneurs' views on cryptocurrencies, viewing them as a risky casino or a series of false promises covering up a casino. He is worried that this phenomenon will have a profound negative impact on the adoption of encryption technology, related laws and regulations, and people working in development in the industry.
In fact, the number of meme coins is experiencing parabolic growth. According to data from the crypto data tracking website CoinMarketCap, 138 ERC-20 meme coins were registered in April this year, a 666% increase from 18 in the same period last year. So far, more than 2,230 meme coins have been recorded on CoinMarketCap, with a total market value of $52,000, accounting for 2.15% of the global cryptocurrency market value.