After Donald Trump’s US election victory, Trump-themed memecoins dropped instead of rising due to the “sell the news” trend. Some of these tokens had gained earlier in the week, but after Trump won, they dropped by double digits. Some popular memecoins lost over 25% in market capitalization only one day after the victory, including TRUMP, MAGA, and TREMP.
Despite the broader rise in the crypto market following Trump’s win, the tokens linked to him and others took a hit. This decline shook investor confidence in the PolitiFi assets, as traders seemed to be selling the news – a pattern not too different from past meme coin behavior. Similar to the rapid surge of Dogecoin prior to Elon Musk’s Saturday Night Live appearance in May 2021, which peaked at $0.73 and fell over 30% shortly after, political tokens experienced a sharp sell-off following the election hype.
Dogecoin is still 74% below its all-time high at current levels. This is part of the “buy the rumor, sell the news” trend common with event-driven tokens that tend to be susceptible to political changes. Despite Trump’s win, the slump in these meme coins should bring in the realization of a possible weakness in the appeal for such meme coins and that some of their liquidity might be shifting from them.
In fact, many investors seem to be shifting funds into Bitcoin and other altcoins as the flagship cryptocurrency has been making new highs, raising hopes of a new bull market.
