As the US elections approach, political tokens, known as Politifi, are gaining traction after the market capitalization surged above $1.36 billion on CoinGecko. The largest one by market cap, MAGA, has increased by 49.9% over the past week. Following closely is ConstitutionDAO, with a weekly gain of 76.6%. The third largest political token by market cap, Jeo Biden, has decreased by 25.9% within the same period.
Crypto is no longer politically neutral
In the past, crypto was politically neutral. Everyone needs to be able to keep track of their funds, right- or left-wing. Recently, attitudes towards crypto seem to be dividing along party lines, especially as the elections draw near. Crypto might influence voter decisions for the first time in a US presidential election.
Trump recently suggested his opponent Biden did not know what crypto was, then stated that the Democrats in general and SEC Chair Gary Gensler were “very much against it.” He told a crowd to vote for Trump “if you’re in favor of crypto.” This sentiment might explain the increasing MAGA price.
Meanwhile, the Biden Administration does seem to be very much against crypto, especially Senator Elizabeth Warren. Throughout the administration’s term, the SEC has been quite hostile toward the industry. Instead of offering crypto firms guidance, it has tried to regulate their activity through enforcement.
Last week, the Senate voted to overturn a new accounting policy proposed by the SEC, which would make it challenging for banks to hold Bitcoin and altcoins for customers. The Senate overturned the policy by a majority. Of the 60 senators who voted against, 12 were Democrats.
Prospects for political tokens
Political meme coins may simply be a way to make a profit. With a total market capitalization of $1.35 billion at the time of writing, they may have gained a foothold in the industry. But what are the prospects?
If Biden wins a second term, the market can expect more of the same: a regulator that continues to target crypto and, ultimately, crypto’s gradual elimination from the US economy.
A Trump victory could serve as a crypto market catalyst. The industry would press for changes at the regulator and more clarity, as long as Trump doesn’t backtrack on his support, which isn’t out of the question.
