- Mechanism Capital said it is betting on tokens and NFTs centered around Donald Trump.
- In the run-up to the U.S. elections, Trump’s media profile is likely to drive these meme coins higher, regardless of whether or not he wins, the crypto fund said.
Several Donald Trump-themed tokens on Ethereum, Solana and other networks spiked as much as 100% in the past 24 hours as crypto fund Mechanism Capital said such tokens were its first positions of 2024.
“Mechanism Capital has accumulated its first new positions of 2024,” founder Andrew Kang said in an X post. “These new positions center around Trump and include Trump-related meme coins and NFTs. Prolific usage of Trump sticker packs to start immediately.”
Those positions are a bet on news cycles and attention on Trump in the coming months ahead of the U.S. Presidential elections, Kang said, and meme tokens are a way to profit from the hype.
“This bet is not just on whether Trump wins or not…His whole strategy is being provocative, saying outrageous and funny things, things that get the people going,” Kang added.
Mechanism’s bet is on a specific TRUMP meme coin offered by @MAGAmemecoin. These tokens have a market capitalization of over $90 million and saw $3.3 million in trading volumes in the past 24 hours, DEXTools data shows.
A crypto wallet thought to be directly owned or operated by Trump, as per labeling by the on-chain platform Arkham, holds over $1 million of these TRUMP tokens. The wallet originally received $7,100 of TRUMP from the meme coin’s developers between August and October of last year but grew significantly in value as their use as a proxy bet on Trump’s campaign grew.
DEXTool data further shows several other Trump meme tokens rose in value in the past 24 hours, some rising as much as 100%, albeit on relatively lower liquidity and trading volumes than @MAGAmemecoin.
As such, issuance of the TRUMP token, or any other meme token, has nothing to do with the former U.S. President directly.
Anyone can call a smart contract and issue tokens on Ethereum (or other blockchains) for a few cents, and the presence of decentralized exchanges means tokens can instantly be issued, supplied with liquidity and traded soon after.
Blockchain bettors crazy for Trump
Meme coins, which are a gauge of popularity and not a prediction market, seem to be gaining popularity as an alternative tool for betting on future events, with tokens centered around the former president becoming a considerable driver for trading volume.
During the 2020 election, FTX created a perpetual contract market in a similar fashion to the crypto derivatives markets it was famous for, asking investors to bet on the outcome of the election. Should Trump have won, it would have risen to $1, and when he lost, it fell to $0.
In the run-up to the election, the TRUMP and BIDEN tokens had a combined volume of nearly $4 million, with just over $2 million traded in the days following the announcement by the White House that he had been diagnosed with Covid.
Over at Polymarket, a contract that’s asking betters to predict the result of the 2024 presidential election has over $37 million in volume, with a $4 million bet on the outcome of a possible Trump presidency and a $3 million bet on Biden.
The market is currently giving Trump a 53% chance, while Biden has a 36% chance.
Bettors are also giving 7% to Michelle Obama and 2% to Gavin Newsom, considered to be wildcard bets as there’s no credible evidence that suggests they would replace Biden as the Democrat’s candidate.