On July 13, as word spread that a would-be assassin had narrowly missed killing Donald Trump at a rally in Butler, Pennsylvania, a trading frenzy began. Within an hour of the shooting, the price of TRUMP, a cryptocurrency inspired by the former president, had jumped up by more than a third, from $6.34 to $8.69. The memecoin was, in effect, a bellwether for the upcoming US election.
Tens of political memecoins have been created within the past year; there also are coins modeled after high-profile politicians such as Joe Biden, Kamala Harris, Robert F. Kennedy Jr., and Alexandria Ocasio-Cortez. They share an iconography and naming convention: The politicians are typically represented by unflattering caricatures and their names are deliberately misspelled (instead of Joe Biden, it’s “Jeo Boden”), in homage to an influential meme comic from the 2010s.
Beyond financial speculation, the coins serve no purpose and promise no utility, but over the course of the US presidential election campaign, their market performance has correlated with the political fortunes of the individuals they depict.
Just as the price of TRUMP rose in the wake of the assassination attempt, an event that commentators had predicted would bolster his chances of reelection, the price of KAMA, the Harris-themed coin, more than tripled after Joe Biden announced his withdrawal from the race, paving the way for the vice president to become the Democratic nominee. Likewise, on June 27, the day of Biden’s disastrous CNN debate performance, the price of BODEN fell by half.
In the US, the Commodities and Futures Trading Commission (CFTC), a financial regulator, has refused to allow gambling platforms to offer bets on election results. It is explicitly illegal under the laws of numerous states for residents to place those kinds of bets, too. But buying into political memecoins has become a loose proxy—one that comes, courtesy of the violent swings in price typical of crypto markets, with both increased risk and potential reward. In aggregate, hundreds of millions of dollars’ worth of political memecoins are currently changing hands every day.
“An investment in a political memecoin isn’t an endorsement or badge of support,” says Rennick Palley, founding partner at investment firm Stratos, whose hedge fund holds memecoins in its portfolio. “The majority of people look at it as a fun way to bet on what is going to happen. If I wanted to speculate on who is going to win, memecoins are clearly the way to do it for maximum risk and maximum upside.”
The debate over whether betting on elections should be legalized in the US extends back decades, but is currently playing out in the US court system. In September, the CFTC denied an application by Kalshi, a New York–based company that runs a market for betting on the outcome of events, to let customers wager on which party would control the two chambers of Congress, which the regulator described as “contrary to the public interest.”