As the United States prepares for the upcoming presidential debate on June 27, crypto analysts predict a surge in volatility for politically-themed meme coins.
The event, which features incumbent President Joe Biden and former President Donald Trump, is anticipated to influence these speculative assets’ value significantly.
Political events stir market movements
The crypto market has recently witnessed the emergence of meme coins such as Super Trump (STRUMP) and Maga (TRUMP) on the Ethereum network, alongside Maga Hat (MAGA) on the BNB Smart Chain, and Jeo Boden (BODEN) and Doland Tremp (TREMP) on the Solana network.
These tokens have quickly captivated the crypto community, amassing a market capitalization exceeding $1 billion and a 24-hour trading volume of over $260 million, per Coingecko’s PolitiFi token category. Despite a declining crypto market where significant assets like Bitcoin (BTC) and Ether (ETH) are experiencing significant losses, these meme coins have not been spared.
The Trump-related tokens have plummeted further amid rumors of an official DJT token set to launch on the Solana network. Analysts from Bitfinex highlight that the upcoming presidential debate could trigger even more pronounced fluctuations for these tokens, as they are closely tied to the political climate and election outcomes.
Presidential candidates to address Crypto policies
The debate is a platform for political confrontation and a significant event for the crypto industry. Both presidential candidates are expected to outline their views on crypto regulations. Key topics likely to be addressed include capital gains taxes and specific crypto taxation policies. These discussions are crucial as they could lead to legislative changes directly affecting the crypto market.
The crypto community keenly watches the candidates’ stances, especially following endorsements by notable figures such as the Winklevoss twins. The Gemini co-founders recently made headlines with their $1 million BTC donation to Trump’s campaign, although they faced issues with exceeding the legal donation limits, leading to a partial refund.
Record highs in Meme coin liquidity
Despite the volatility, meme coins’ liquidity has hit unprecedented levels. Data from Paris-based Kaiko shows that liquidity, measured by 1% market depth, has reached a record $128 million. This surge facilitates the more straightforward execution of large transactions at stable prices, optimizing the bid-ask spread and reducing the cost of trade executions.
However, while market makers increase their presence, the inherent risk associated with these highly volatile tokens remains a concern. According to Kaiko, the bid-ask spreads are still above 2 basis points on most centralized exchanges, indicating that while liquidity has improved, meme coins are still considered precarious investments by the broader market.
The coming week is crucial for investors and observers alike, as the political developments could dictate market dynamics extensively. The anticipated volatility presents both opportunities and risks, underscoring the speculative nature of these politically influenced meme coins.
The post Meme Coins Volatility Expected to Spike as US Presidential Debate Approaches first appeared on Coinfea.