Author: David Canellis, Blockworks; Translator: Tao Zhu, Golden Finance
Political memecoins — PolitiFi — had a glorious first half of the year. But it has been on hold since then.
The total market value of the five most well-known tokens, MAGA (TRUMP), MAGA Hat (MAGA), Doland Tremp (TREMP), Jeo Boden (BODEN) and Kamala Horris (KAMA), peaked at more than $1.25 billion in early June.
Now they are worth less than $170 million, a drop of nearly 90%.
The remnants of ConstitutionDAO, which lost a rare first copy of the U.S. Constitution in an auction in late 2021 to Citadel CEO Ken Griffin, now make up almost two-thirds of the entire PolitiFi market, according to CoinGecko. Whether it really deserves to be ranked alongside the likes of political parody memecoins, 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 lagged 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 five largest 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 fared 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 somewhat telling.
One simple reason this particular type of memecoin is falling could be that there are no new interested holders entering its market, whose liquidity could outweigh sellers and drive up the price. MAGA holders are spread across four different blockchains, with about three-quarters on Ethereum and Solana.
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.
Notice that the points in Trump’s narrative align directly with the large 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.
No such luck since, with just 424 new holders as of Friday morning after Tuesday’s debate with Harris. Meanwhile, Polymarket’s odds on Trump winning in November have dropped from 52% to 49%.
All in all, of the 80,190 addresses holding MAGA (TRUMP), about 30% (24,300) bought after the token hit an all-time high of $17.51 in early June. After losing nine-tenths of its value, it currently trades at $2.25.
Sure, 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.
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