After Trump won the U.S. election, Trump-themed meme coins TRUMP, MAGA, TREMP, and STRUMP all saw a crash, with the total market cap dropping over 21% on the same day.
MAGA, by market capitalization, the largest Trump-themed meme coin, dropped 50.7% in the past 24 hours, trading at $1.71 at the time of writing. The market cap of this altcoin fell from $212 million on November 6 to $79 million at the time of writing.
The MAGA hat meme token, inspired by the iconic red hat worn by Trump during his political campaign, also plummeted by 51%, with a market cap dropping to $39 million.
Dark Magic had the largest increase on November 5, rising overnight from $0.008 to $0.0018. Since then, the token has fallen 62% from pre-election levels, trading at $0.0045, with a market cap evaporating by over $13.5 million. Similarly, Super Trump (STRUMP) also saw a significant drop of 54.9%, with a market cap shrinking by $11 million.
Other popular meme coins that had previously profited from President Trump's victory have already collapsed as of the time of writing, with losses for Doland Tremp, TRUMPCOIN, TRUMP 47 (47), and Pepe Trump (PTRUMP) ranging from 50-65%.
Traders seem to have sold off these news, which is a familiar trend for meme coins, as they often experience significant sell-offs after peaks of hype—much like Dogecoin, the first and largest meme coin in the industry.
In May 2021, the rapid growth of Dogecoin before Elon Musk's appearance on Saturday Night Live became a classic case of traders selling off news. Before the broadcast on May 8, Dogecoin (DOGE) surged to an all-time high of $0.73, as Musk was a fervent supporter of Dogecoin and revealed his role on SNL.
However, during and after the live broadcast, the hype quickly faded, with traders dumping their holdings, causing the price of DOGE to drop over 30% within hours. At the current price, the token is still 74% lower than its all-time high.
This pattern is also evident in PolitiFi tokens, which are commonly referred to as 'event tokens' because they align with political developments. However, despite Trump's victory, the market still saw a decline, which may indicate that the hype surrounding this meme coin set is waning.
One possible scenario is that a large amount of liquidity from these PolitiFi tokens is flowing into Bitcoin and other altcoins as the flagship cryptocurrency reached new highs in the past day, igniting hopes for the start of a bull market.
Notable altcoins like Ethena and Raydium both achieved double-digit gains, while the overall meme coin market rose by over 13%, indicating that after the election, PolitiFi tokens are facing isolated sell-offs.
